* Euro falls to six-month low vs dollar on Fed, Greece
* Fed keeps rates low but ends programs, Hoenig dissents
* Central banks to end emergency swap lines on Jan. 31
* Greece fiscal woes weigh on euro zone outlook, euro
(Adds quotes, Fed details, updates prices, changes byline)
By Steven C. Johnson
NEW YORK, Jan 27 (Reuters) - The dollar rose to a six-month
high against the euro on Wednesday as the Federal Reserve
sounded a slightly more optimistic note on the U.S. economy
even though it will maintain low interest rates for an extended
period.
The Fed kept rates at record lows near zero to nurture an
economic recovery held back by high unemployment. But it also
said it plans to end emergency dollar swaps with other central
banks and said the U.S. economy has continued to strengthen.
Major central banks, including those in the euro zone,
Britain, Japan and Switzerland, said they would let emergency
swap arrangements with the Fed expire on Feb. 1.
For more, see [] and [].
The euro fell to $1.4004 <EUR=>, according to Reuters data,
its lowest since mid-July, well off a session peak of $1.4096.
Worries about Greece's fiscal health also hurt the euro.
"The statement is overall a positive one. The Fed is saying
they have enough confidence in the markets to let the liquidity
measures expire as expected," said Kurt Karl, chief U.S.
economist at Swiss Re in New York.
And while the Fed did not change its outlook on rates, a
dissenting vote by Kansas City Fed President Thomas Hoenig
suggested pressure was building for tighter policy, which
should add to dollar support.
"So going forward, that's more of a dollar positive
scenario since that suggests in coming meetings, we could see
that phrase (extended period) removed from their statement,"
said Joe Manimbo, a currency trader at Travelex Global Business
Payments, Washington.
The dollar also rose 0.3 percent to 89.90 yen <JPY=>,
wiping out earlier losses that took it as low as 89.15 yen. It
was also up 0.5 percent at 1.0519 Swiss francs <CHF=>, while
the British pound was unchanged at $1.6150 <GBP=>.
Worries about Greece also kept the euro under pressure,
with the spread of the 10-year Greek bond yield <GR10YT=RR>
over benchmark German Bunds <EU10YT=RR> hitting its widest
since Greece adopted the euro currency in 2001.
Fitch Ratings added to investor anxiety when it said a
downgrade for Portugal's credit rating is "more likely than
not." See [].
"The ability of these countries to actually go to capital
markets for refinancing down the road will certainly have a
bearing on the euro," said Dean Popplewell, chief strategist at
OANDA, an FX brokerage in Toronto.
(Additional reporting by Wanfeng Zhou)
(Editing by Theodore d'Afflisio)
