The dollar was firmer against major currencies after last night's Federal Reserve Open Market Committee raised US interest rates to 3.25 pct and confirmed that monetary tightening will continue to rise at a measured pace.. "The 25 basis point rate hike at the FOMC meeting yesterday was no surprise nor was the repeat of the "measured" pace comment, but some had looked for signs that the Fed is close to ending its rate hike cycle," said CALYON analyst Mitul Kotecha. He said the dollar is likely to find further support from the Fed statement, sufficient to push the euro below 1.20 usd in the coming days, due to favorable US interest rate spreads -- given that the next moves in the euro zone and the UK are set to be down. The euro also failed to capitalise on a survey showing an improvement in manufacturing sector activity in June. The purchasing managers' index for the 12-nation single currency zone rose to 49.9 in June from 48.7 in May, still showing a contraction but well above analysts' expectations for a more modest rise to 49.0. Meanwhile, the pound remained weak after a string of very disappointing data over the past few days intensified speculation that the Bank of England will cut interest rates as soon as August. "Sterling has remained under pressure as the weakness in UK data persists," said HBOS currency analyst Steve Pearson. Short sterling contracts indicate that the market has fully discounted two rate cuts this year, with a third now partially priced-in, whilst the spread between UK and euro zone short-term interest rates continues to narrow, he added.