British pound falls after U.K. inflation report The U.S. dollar rose against most of its rivals Wednesday as dissatisfaction over a U.S. bank-rescue plan kept investors running to safe-haven assets. The greenback then pared gains after Congress gave the green light to a $789 billion stimulus package. The dollar index , which measures the U.S. unit against a trade-weighted basket of six major currencies, rose 0.03% to 85.799 in late North American trade, a more muted gain than earlier in the day, when it had risen 0.5%. Against the euro, the buck turned lower. The euro last bought $1.28994, up from $1.2867 in late North American trade Tuesday. The dollar also modestly paired its gains against the Japanese yen. The greenback recently bought 90.41 yen vs. 90.49 before the congressional announcement, though was still up from 90.17 late Tuesday. The dollar had traded lower against the yen in overseas trading. Negotiators from the House and Senate reached an agreement on a $789 billion economic-stimulus plan, U.S. Senate Majority Leader Harry Reid said Wednesday afternoon. The agreement on the bill, which includes tax cuts, spending on infrastructure projects and relief for people who lost their jobs or homes, sent U.S. stock indexes higher. Read more. The dollar spent most of Wednesday trade moving upward, as lasting doubts over the U.S. government bank-bailout plan continued to encourage flows into safe-haven currencies. "Market sentiment is still quite fragile following the disappointment -- and by now impatience -- over the lack of clarity in Obama-Geithner Financial Stability Plan announced yesterday," said Stephen Gallo, head of market analysis for Schneider Foreign Exchange Ltd. Remarks from the Bank of England that it may have to increase the supply of money to stimulate its economy also strengthened the dollar's hand against the pound. Dollar advances Wednesday added to Tuesday's strong gains, made on the back of a long-awaited bank-rescue plan unveiled by U.S. Treasury Secretary Timothy Geithner. A stimulus bill, promoted by President Barack Obama's administration, also advanced in the Senate. Traders said Geithner's plan lacked details and direction, with disappointment weighing on stocks and spurring purchases of the dollar and yen. These low-yielding currencies have tended to rise in recent months when investors seek safety. It is "really just carry over from yesterday," said Win Thin, senior currency strategist at Brown Brothers Harriman & Co., of the dollar's action Wednesday. Risk aversion punished emerging markets currencies, he said. Traders Wednesday also digested the latest data on the U.S. trade deficit. The nation's trade balance narrowed to a six-year low of $39.9 billion in December, likely helped by the end of a strike at Boeing Co., but it did not fall as much as economists had predicted. Read Economic Report on trade data. "The data does not suggest any underlying improvement from what we already knew," said Alan Ruskin, head of currency strategy for RBS Greenwich Capital, in emailed comments. He called the report "disappointing" for the U.S. dollar "since it needs trade rebalancing to be an important outcrop of the global travails." Pound down

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