The dollar gained against the euro on Friday on speculation that the Federal Reserve may not make an aggressive move to lower interest rates when it meets next Tuesday.

The Federal Reserve cut its benchmark interest rate by 0.75 percent to 3.5 percent earlier in the week to stave off concerns of a possible U.S. recession. Positive data from the U.S. Labor Department yesterday showed that the number of unemployment applications dropped, further bolstering the U.S. economic outlook.

However the dollar and euro fell versus the yen as U.S. stocks dropped in afternoon trading amid concern that financial companies will report additional losses related to the current credit crisis. Lessened chances of a Fed cut in the lending rate also lowered the possibility an extra boost to stocks.

The dollar was up to $1.4665 at 2:00 p.m. in New York from $1.4755 late Wednesday. The yen rose to 106.80 yen per dollar from 107.18 yen yesterday. The yen also gained against the euro, up to 156.61 from 158.12 on Wednesday.