* Dollar widens gains against yen and euro
* Fed trims monthly bond buying to $55 bln
* Yen off more than 1 percent
(Recasts after Fed meeting, adds quotes, updates prices)
By Michael Connor
NEW YORK, March 19 The dollar jumped on
Wednesday as traders expanded early gains against the euro and
the yen after U.S. central bankers cut back bond purchases and
cited foul winter weather as a factor for worrying softness in
American economic data.
The yen fell more than 1 percent against the dollar while
the dollar index gained 0.8 percent to 80.056 after the
Federal Reserve ended a two-day meeting by saying it would push
ahead with plans to wind down its stimulus. It also said it will
likely need to keep interest rates low even after the economy
recovers given lasting scars from the financial crisis.
"It's a little bit more hawkish than people expected," said
Shaun Osborne, foreign exchange strategist at TD Securities in
Toronto. "They seem to see interest rates rising sooner rather
than later. ... This is helping the dollar."
In addition to reducing economy-bolstering bond purchases to
$55 billion a month, the Fed said it could keep interest rates
low even after the U.S. job market revives fully and inflation
rises to its target.
Ahead of the Fed policy statement, the dollar had been up
against the yen and the euro but climbed sharply
afterwards. The dollar in late New York trade stood at 102.55
yen to the dollar, up 1.2 percent.
The euro backed away from the $1.40 level it had been
approaching and was at $1.3816 on Wednesday for a decline of
The Swiss franc also dropped against the dollar and
traded off 1.05 percent at 0.8820 franc to the dollar.
Sterling, which had come off a one-month low and
risen as high as $1.6653, was also knocked down by the Fed news
and was off 0.4 percent at $1.6527 in late New York trade.
Sterling had risen with help from British data showing wages
ticking higher and a steadily improving jobs market. The number
of Britons claiming jobless benefits fell more than expected
while wages rose 1.4 percent year-on-year, which though higher
than forecast was still below inflation.
Investors remained cautious over tensions in Ukraine.
Anxiety eased somewhat after Russian President Vladimir Putin
said on Tuesday he did not plan to seize other regions of
Ukraine after Crimean citizens on Sunday voted to be annexed by
(Additional reporting by Anirban Nag in London; Editing by