Dollar Rally Fizzling Out Amid Global Economic Woes
Washington (Dec 10) The dollar continued to pull back Wednesday, easing further from seven-year highs amid speculation the Federal Reserve will delay rate hikes due the wobbly global economy.
Analysts say the Fed may next week remove its pledge to keep rates ultra-low for a "considerable time," but that the first rate hike may not come until mid-2015.
The dollar had surged higher in recent months as traders bet the Fed would hike rates much earlier than that.
Meanwhile, other central banks are poised to offer additional stimulus to jump start sluggish economies in the euro zone and Japan .
The dollar eased to USD1.2440 versus the euro, down 2 cents from last Friday's 2-year highs near USD1.2240 .
On the economic front, the French industrial production declined unexpectedly by 0.8% in October, from September when output remained flat, the statistical office Insee said. Production was forecast to grow 0.2%.
The dollar drifted lower to USD1.572 versus the sterling, having touched a yearly high near USD1.55 over the weekend.
Bank of England Governor Mark Carney said UK interest rates will have to rise despite an expected recent dip in inflation. However, the exact timing of the hike remains murky, analysts say.
A third day of losses dropped the dollar to Y118 versus the yen, down from last week's 7-year peak above Y122 .