The dollar recovered ground on Friday and U.S. stock index futures pointed to a steady open on Wall Street, as markets regained some poise after falling on concern over a Federal Reserve plan to buy government debt. The dollar has fallen 4.5 percent against a basket of currencies .DXY this week, in sight of its biggest weekly fall since the Plaza Accord of 1985, when major economies agreed to a formal depreciation of the dollar. Analysts said the Fed's radical decision to buy $300 billion of longer-term debt and vastly expand its balance sheet beyond the current $2 trillion meant more and more U.S. dollars would be created, straining demand for the currency and generating inflation. But the dollar clawed back some ground in Friday's session. Friday is a "triple witching" day of futures and options expiries, which typically adds to market volatility. "The initial dollar-selling over the Fed was a bit overdone, and it's not surprising to see profit-taking on short-term positions," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ. The dollar rose 0.75 percent against a basket of currencies and around 0.66 percent against the euro to $1.3574 . It rallied 1.2 percent against the yen to 95.60 , with Tokyo markets shut for a holiday. Data on Friday also showed euro zone industrial output staged a new record plunge in January. A senior German lawmaker told Reuters that euro zone countries have agreed a rescue plan to prevent members of the currency bloc going bankrupt and will probably use it. [ID:nLK296118] A European Central Bank spokesman said the lawmaker's comments the ECB has a reserve fund to help euro zone states were untrue. U.S. stock index futures on the Dow Jones DJc1, S&P 500 SPc1 and Nasdaq NDc1 indicated a steady to firmer open on Wall Street, and the pan-European FTSEurofirst 300 index .FTEU3 of top shares trimmed earlier losses to gain 0.18 percent to 716.34.

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