* Dollar at more than 3-mo high; euro, Swiss franc fall
* Euro falls 2 cents vs dollar to $1.4330
* Second Greece downgrade stokes worry about euro zone
* More upbeat Fed economic view helps dollar (Recasts, updates prices, adds US data, comment, changes byline, dateline)
By Steven C. Johnson
NEW YORK, Dec 17 (Reuters) - The dollar soared on Thursday, nearing a 3-1/2-month high against the euro, a day after the Federal Reserve highlighted improvement in the U.S. economy and stood by plans to shutter most emergency lending in February.
The euro, which fell below $1.44 for the first time since early September, struggled after Standard & Poor's became the second ratings agency to downgrade Greece in just over a week, stoking fears about the euro zone country's public finances.
The dollar's gains were tempered slightly by data showing U.S. claims for jobless benefits unexpectedly rose last week. However, it was still up more than 1 percent against other major currencies, including the Swiss franc, sterling and the Australian dollar, as gains in thin pre-holiday trade triggered automatic buy orders and prompted a wave of short-covering.
"The U.S. economy is picking up, and the Fed acknowledged this by saying it will stop most of its quantitative easing by Feb. 1, while the Greece issue might create a bad cloud over the euro zone economy," said Hidetoshi Yanagihara, senior currency trader at Mizuho Corporate Bank in New York.
The Fed gave no indication in Wednesday's statement that it was set to raise interest rates from near zero, reiterating they would stay low for an extended period. But it highlighted improvements in the economy, which markets have seen reflected in a slower pace of job losses and improved retail sales data.
The euro fell around two U.S. cents to $1.4330, according
to Reuters data, its lowest level since Sept. 8. It was last at
$1.4342
Sterling hit a two-month low, falling 1.5 percent to
$1.6091
Greek assets took a lashing after Standard & Poor's cut Greece's rating by one notch to BBB-plus from A-minus late in European hours on Wednesday.
The dollar rose 0.3 percent to 90.08 yen
Data on Thursday showing more Americans filing for first-time jobless benefits in the latest week knocked the dollar off its session high, but the same report showed the four-week moving average fell slightly.
"Overall, the labor market is recovering, though the last two claims numbers suggest the pace is still gradual," said Vassili Serebriakov, strategist at Wells Fargo in New York.
The dollar was up 1.1 percent to 1.0497 Swiss francs
For most of 2009, the dollar has struggled on the view that the Fed would keep interest rates low longer than other central banks and that the U.S. economy would lag the global recovery.
"Like the proverbial hot knife through butter, the dollar is moving sharply and violently higher, most notably relative to the euro, and we are now more and more convinced that this is something more than a mere correction," said Dennis Gartman, independent investor and author of The Gartman Letter.
He cited U.S. improvement and said an excess of negative dollar sentiment that drove it some 15 percent lower against the euro since March, was finally starting to turn around.
The dollar was unmoved by comments from Chinese central bank deputy governor Zhu Min. MNSI quoted him as saying dollar depreciation would continue and that it was getting harder for foreign governments to buy Treasuries as the U.S. current account deficit shrank.
(Additional reporting by Gertrude Chavez-Dreyfuss in New York and Jessica Mortimer in London, Editing by Chizu Nomiyama)