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Dollar gains on strong US growth numbers, Fed taper

The dollar gained against the euro and other major currencies on Thursday after the US reported strong fourth-quarter growth and the Federal Reserve decided to pare back its stimulus.

NEW YORK: The dollar gained against the euro and other major currencies on Thursday after the US reported strong fourth-quarter growth and the Federal Reserve decided to pare back its stimulus.

At 2200 GMT the euro traded at $1.3554, down from $1.3662 late Wednesday.

The dollar rose to 102.71 yen from 102.25 yen, while the euro slipped to 139.21 yen from 139.71.

The British pound dipped to $1.6489 from $1.6560 while the dollar gained to 0.9023 Swiss franc from 0.8943.

The dollar's gains came after official data showed US economic growth at 3.2 percent in the fourth quarter, above the 3.0 percent expected by analysts.

The report followed Wednesday's decision by the Federal Reserve to cut back its stimulus by another $10 billion a month, the same size and the cut announced in December, to bring the bond buying program down to $65 billion a month and on track to expire by the end of the year.

The prospect of faster growth and less easy money sent US bond yields higher and made the dollar more attractive to buyers.

David Song of DailyFX suggested the Fed move puts it on an opposite path to the European Central Bank, and predicted more downward pressure on the euro.

"The single currency may weaken further in February should the European Central Bank show a greater willingness to further embark on its easing cycle," he said.

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