The dollar fell against the euro on Wednesday, pushing gold to fresh record highs, after the U.S. Federal Reserve indicated it was prepared to take further measures to boost a faltering economic recovery. In morning trade, the euro rallied to 1.3377 dollars from 1.3263 dollars late on Tuesday in New York, with the European single currency also supported by another successful sale of state bonds, this time by Portugal. Against the Japanese currency, the dollar dropped to 84.65 yen from 85.02 yen on Tuesday. The price of gold shot up to a record 1,295 dollars an ounce, benefiting from the U.S. currency's weakness as the precious metal is viewed as a safe-haven investment. "A combination of a weakening dollar and the Federal Reserve indicating it may loosen monetary policy further is pushing gold to record highs," ETX Capital senior trader Manoj Ladwa told Agence France Presse. "While some are calling for it to run out of steam around the 1,300-dollar level, the momentum still clearly remains to the upside." The Federal Reserve set the tone for the markets after it said it was prepared to take new stimulus measures if necessary while leaving interest rates at record lows. It said it would "continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery." Those measures would likely include buying treasury bonds, causing the market to brace for further dollar losses. The Fed comments will likely keep the dollar weak in the near-term, with U.S. interest rates under pressure, analysts said. "The dollar is being dumped as the suggested credit easing spawned expectations of lower interest rates" in the United States, said Daisuke Karakama, market economist at Mizuho Corporate Bank. Elsewhere on Wednesday, Portugal raised 750 million euros (1.0 billion dollars) from the sale of 4- and 10-year government bonds. It comes a day after fellow eurozone members Ireland, Greece and Spain all enjoyed successful bond issues, which dampened concern about the indebted nations. The British pound was mixed meanwhile as minutes of the last Bank of England monetary policy meeting indicated that the central bank could be close to fresh stimulus measures of its own. In London on Wednesday, the euro changed hands at 1.3377 dollars against 1.3263 dollars late in New York on Tuesday, at 113.24 yen (112.76), 0.8536 pounds (0.8488) and 1.3251 Swiss francs (1.3213). The dollar stood at 84.65 yen (85.02) and 0.9906 Swiss francs (0.9960). The pound was at 1.5670 dollars (1.5624). On the London Bullion Market, the price of gold jumped to 1,291.75 dollars an ounce from 1,275 dollars an ounce late on Tuesday.(AFP)

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