All eyes in the currency markets were on the US Federal Reserve, as minutes from its latest Open Market Committee (FOMC) meeting hinted that the policy of rate rises could be coming to an end.

This morning the dollar was at 1.2346 against the euro and at 1.7850 to the pound.

The US interest rate rose to 4.75 per cent in March after its 15th monthly increase in a row, taking it to its highest level since April 2001, but the appointment of Ben Bernanke as the Reserve's chairman could signal a change in policy.

His predecessor, the veteran Alan Greenspan, had followed a policy of escalation on interest rates in a bid to stave off the threat of inflation, but minutes from the latest FOMC meeting suggest its members believe the time is ripe for change.

The minutes claimed "most members thought that the end of the tightening process was likely to be near, and some expressed concerns about the dangers of tightening too much, given the lags in the effects of policy".

Nonetheless, the FOMC has vowed that it will still move with regard to inflationary pressures, saying that checking these pressures is vital to sustaining healthy economic performance.

The prospect of an end to rate rises immediately impacted the Dow Jones index, pushing it up by 194.99 points to close at 11,268.77 on Tuesday.