FOREX-Dovish Fed pushes dollar to 2-month low vs euro

* Dollar hits 2-mth low vs currency basket, euro

* Dovish Fed minutes increase U.S. growth worries

* Focus on U.S. data, JPMorgan earnings later in the day

By Jessica Mortimer

LONDON, July 15 (BestGrowthStock) – The dollar fell to a two-month
low against the euro and a basket of currencies on Thursday
after dovish U.S. Federal Reserve minutes heightened concerns
about the outlook for the U.S. economy.

Fed officials last month felt they should be ready to
consider additional steps to boost the U.S. economy if an
already softening outlook took a noticeable turn for the worse.
[ID:nN14148574]

“The Fed minutes were particularly dovish, with the
discussion about the possibility of easing measures providing a
soft underbelly for the dollar,” said Chris Turner, currency
strategist at ING.

The Fed also trimmed forecasts for growth this year. A
string of U.S. data is due out on Thursday, including industrial
output and weekly jobless claims [ECI/US] and any weakness could
trigger more dollar selling, analysts said.

The minutes showed about half of U.S. policymakers saw
growth risks to the downside, with some worried about the
prospect of a deflationary spiral.

At 0956 GMT, the euro was up 0.4 percent to $1.2786 (EUR=: ).
It earlier hit a two-month high around $1.2803 when it broke
just above an options barrier at $1.2800, traders said.

JPMorgan earnings, due later in the day, were also in focus,
with analysts saying a solid report could boost risk appetite
and lift equity markets, helping the euro and perceived
higher-risk currencies.

Euro sentiment was boosted by Spain selling nearly 3 billion
euros of bonds in an auction which traders said met with solid
demand, providing reassurance about the debt-laden country’s
ability to raise cash. [ID:nLDE66D1KU]

The dollar index (Read more about the global trade. ) (.DXY: ) was down 0.4 percent at 83.081,
having hit a two-month low of 83.004.

The index fell through support at around 83.15, a 38.2
percent retracement of its rise from a low of 74.17 in November
2009 to a high of 88.59 on June 8.

“U.S. data will be a very important market-moving factor
today, especially after the minutes from the Federal Reserve’s
last meeting fanned speculation of further policy easing,” said
Hideki Hayashi, global economist at Mizuho Securities in Tokyo.

The dollar also hit a one-week low against the yen (JPY=: )
around 87.86 yen.

Traders said charts looked bearish after the greenback
failed the previous day to rise above 89.23 yen — a 38.2
percent Fibonacci retracement of the dollar’s fall from its June
high just below 93 yen to a July 1 low of 86.96 yen.

(Additional reporting by Rika Otsuka in Tokyo)

FOREX-Dovish Fed pushes dollar to 2-month low vs euro