* Fed makes new rate pledge, pumps more money * Dollar falls vs euro, higher-yielders * Treasury prices fall sharply after brief bounce * Gold rises as Fed move bolsters demand for inflation hedge By Wanfeng Zhou NEW YORK, Dec 12 U.S. stocks rose and the euro jumped against the dollar on Wednesday after the Federal Reserve ramped up its monetary stimulus and said it would keep benchmark U.S. interest rates near zero until the jobless rate falls sharply. Treasury prices briefly added to gains after the Fed announcement but faded on disappointment that the Fed will not buy as much in long-dated issues as some traders had hoped. The Fed said it will likely keep official rates near zero for as long as unemployment remains above 6.5 percent, inflation is projected to be no more than 2.5 percent one or two years ahead and inflation expectations remain contained. Fed officials, who cut their forecasts for economic growth and inflation next year, committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September, as expected. "It's another round of easing. It is good for stocks and risk more generally. And they came out with an economic data point as a guideline. That's very important, because it helps the market anticipate an exit strategy," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. "The markets had not expected this would necessarily happen at this meeting. It gives some certainty rather than having everything open-ended." The Dow Jones industrial average gained 39.57 points, or 0.30 percent, to 13,288.01. The Standard & Poor's 500 Index gained 6.23 points, or 0.44 percent, to 1,434.07. The Nasdaq Composite Index gained 4.82 points, or 0.16 percent, to 3,027.12. The S&P 500 was up for a sixth straight day, its longest winning streak since August, although gains have been less than 0.5 percent per day, on average, in part due to uncertainty over the cliff negotiations. The MSCI global stock index advanced 0.5 percent to 338.65. The FTSEurofirst 300 closed up 0.1 percent at 1,139.65. The euro rose 0.6 percent to $1.3082 after hitting a session peak of $1.3096 after the Fed announcement. The euro had jumped sharply minutes before the Fed announcement. Traders attributed the move to comments from Silvio Berlusconi, who said he would withdraw as a candidate in Italy's coming election if outgoing Prime Minister Mario Monti ran as the head of a "moderate" coalition. The dollar fell to multi-month lows against higher-yielding currencies such as the Australian and New Zealand dollars . Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said the scope for further dollar losses may be somewhat limited, given investor concern about the U.S. "fiscal cliff," which could boost the safe-haven dollar. U.S. House of Representatives Speaker John Boehner said on Wednesday "serious differences" remain with President Barack Obama in talks to avert the steep tax hikes and budget cuts set for the new year. "Uncertainty about the euro zone, concerns about Italy and the Japan election this weekend should also limit dollar losses," Esiner said. The dollar rose to an eight-month high of 83.29 yen and was last up 0.7 percent at 83.12 on bets the Bank of Japan will implement more aggressive monetary easing after an election on Sunday expected to yield a victory for the Liberal Democratic Party. The benchmark 10-year U.S. Treasury note was down 13/32 in price, the yield at 1.6988 percent. Thirty-year bonds dropped 1-4/32 in price to yield 2.897 percent. The new bond buying replaces a more modest "Operation Twist" program set to expire at the end of the month. The Fed will expand purchases to five-year notes from the current seven-, 10- and 30-year Treasuries. "They are basically taking out the same amount of duration that they were in Twist, but they are buying less in the long end than they had been before," said Ira Jersey, an interest rate strategist at Credit Suisse in New York. Oil prices rose. Brent crude futures were up $1.67 to $109.68 a barrel. U.S. crude rose 98 cents to settle at $86.77 a barrel. Spot gold rose to $1,715 an ounce after the Fed decision bolstered its inflation-hedge appeal.