* Euro gains vs dollar after release of Fed minutes
* Minutes indicate more QE on the agenda
* Trading volatile as ECB's Weber comments on euro zone
* Dollar hovers below 82 yen, near 15-year low
(Updates details, updates prices)
NEW YORK, Oct 12 (Reuters) - The euro rallied sharply against the dollar on Tuesday after minutes from the Federal Reserve's latest meeting showed members felt further monetary easing could be appropriate before long.
The Fed's comments were in sharp contrast to those from European Central Bank Governing Council member Axel Weber earlier in the New York session where he said the ECB's government bond-buying program has not worked and should be scrapped.
The euro swung wildly between gains and losses throughout the session but finally settled in positive territory after the Fed minutes indicated officials believed in September that further help for the struggling recovery might be needed soon and discussed how best that might be done.
"The comments support and reinforce the view that there will be Fed policy action at the November meeting," said Nick Bennenbroek, head of FX strategy at Wells Fargo in New York. "This seems to be the consensus now and so we're seeing the euro gaining against the dollar."
Bennenbroek said further quantitative easing had already been priced into the market and that was limiting the euro's gains but the overall weak trend in the dollar remains in place.
In late afternoon trading, the euro was up 0.4 percent at $1.3922, well off the session low of $1.3775 on trading platform EBS which had marked it lowest level since Oct. 5. But it was still a cent away from the more than eight-month high of $1.4030 hit last week.
The euro/dollar traded with a 20-day relative strength index reading of 73.027, leaving the euro continuously overbought against the dollar on that basis since September 20.
Euro trading had been volatile throughout the session earlier paring losses against the dollar after European Central Bank Governing Council member Axel Weber said the ECB's government bond-buying program has not worked and should be scrapped.
Speaking in New York, Weber called for the ECB to scale back its other forms of support as soon as possible and not delay interest rate hikes.
Weber's comments had already set the tone to differentiate the euro view with that of the dollar ahead of the release of minutes from the Federal Reserve's September policy meeting.
"The ECB is concerned about the stability of their currency and they are consequently planning to withdraw the minimal amount of QE they have supplied," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey before the Fed minutes. "The Fed is not concerned and seems to be planning to double its QE with the result the euro is up. The dollar is down."
A Reuters poll of U.S. primary dealers conducted last week forecast a new round of quantitative easing would range between $500 billion and $1.5 trillion, with market players also keen to assess whether the Fed will adopt a "drip-feed" or "shock-and-awe" approach.
Most think the Fed will announce its second round of easing after its next meeting on Nov. 3.
The dollar fell 0.5 percent to 81.72 yen, not far from a 15-year low of 81.37 struck on Monday on electronic trading platform EBS.
Most market players expect pressure to remain on the dollar/yen pair, with a test of 80 yen and the record trough of 79.75 yen still in sight.
Analysts said the risk of another round of intervention to weaken the yen seemed to have increased after Japan weathered the flurry of weekend G7 and IMF meetings with hardly any criticism of its recent yen sales.
The dollar fell 0.8 percent against the Swiss franc to 0.9566, trading as low as 0.9556 on EBS, just above the life time low of 0.9555 on EBS touched last week. (With additional reporting by Gertrude Chavez-Dreyfuss) (Reporting by Nick Olivari and Wanfeng Zhou; Editing by Andrew Hay)