LONDON (AFX) - The dollar was well bid in early trade boosted by the US Fed's upbeat tone on the economy which many believe could be the first indication that the recession is coming to end, dealers said. The Fed kept its benchmark rate unchanged at 1.75 pct and concluded that the "outlook for economic recovery has become more promising." But its easing bias was maintained due to uncertainty over prospects for household spending and investment. The news comes on the back of a better-than-expected 0.2 pct rise in the US fourth quarter GDP. The dollar is firm after the Fed decision and comments but has not made substantial gains, Paul Bednarczyk, economist at 4CAST said. The Fed's upbeat remarks were tempered by the caution over household spending and investment. Taken together they mean that interest rates are unlikely to rise too soon, he added. Michael Klawitter, economist at West LB said the volatility in US equities has been affecting short-term dollar movements. But a host of US data is scheduled for release today. Today's Chicago PMI index is likely to be better than expected. Tomorrow's labour market report may also look rosy. The economic fundamentals should underline the dollar's firmness, he added. The euro was little changed. Some Asian demand is keeping the currency above the 0.86 usd threshhold, Bednarczyk at 4CAST said. But risks of further falls are all too clear. "Apart from the fundamentals, the seasonal patterns also point towards further downward pressure," Klawitter at West LB said. Sterling fell back despite a string of favourable data. Close on the heels of a record rise in consumer credit yesterday, the GfK confidence barometer surged to its highest level since June 2001. The morning's MORI poll on economic optimism was also higher. The risk is that the Bank of England may well have to raise rates before the European Central Bank - undermining the UK government's EMU aspirations, Klawitter said. Elsewhere, there was little evidence to show that the yen had benefited from fiscal year end related repatriation flows. It was marginally weaker against the dollar.