“The dollar fell against the euro for a third day on speculation the Federal Reserve will trail the European Central Bank in tightening monetary policy.
The Dollar Index dropped before the U.S. central bank today releases minutes from its April 26-27 meeting after which Chairman Ben S. Bernanke signaled the economy still requires monetary support. The euro was supported by prospects the ECB will raise interest rates even as the region’s debt crisis persists. New Zealand’s dollar advanced for a second day versus the greenback after a report showed producer prices rose in the first quarter.
“We don’t hear any talk about rate increases in the U.S., while such expectations are supporting the euro,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The Fed is printing dollars aggressively, but we have yet to see inflation concerns rise. That means the U.S. is far away from exiting stimulus measures.”
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