Dollar Drops as Fed Officials Warn on Slowing Growth; Real Gains


Forex Trading Floor brings todays news on The Dollar from Bloomberg.

The dollar declined for the first time in three days after Federal Reserve officials said a worldwide economic slowdown may delay interest-rate increases, damping demand for the U.S. currency.

The Bloomberg Dollar Spot Index has lost 1.4 percent since reaching the highest since June 2010 on Oct. 3. Brazil’s real led currency gains as a voter poll indicated that opposition candidate Aecio Neves would win in the election runoff this month. Australia’s currency climbed from almost a four-year low as its biggest trading partner China reported better-than-forecast export growth and an unexpected pick-up in imports. China’s yuan rose as the central bank raised the currency’s reference rate.

“Some of the comments we’ve been seeing from Fed officials have a cautious tone,” Eric Viloria, a strategist at Wells Fargo & Co. in New York, said in a phone interview. “We’d expect some consolidations, if not corrections, of the dollar strength.”

The Bloomberg Dollar Spot Index dropped 0.5 percent to 1,064.58 at 5 p.m. New York time. The index slid 0.8 percent last week after ending Oct. 3 at 1,078.65, the most since June 2010, based on closing prices.

Market Prices

The dollar weakened 1 percent to $1.2752 per euro. It also declined 0.7 percent to 106.86 yen and touched 106.78, the weakest level since Sept. 11. Japan’s currency slipped 0.2 percent to 136.24 per euro.

The real rallied 1.4 percent to 2.3943 per dollar as a poll published on the website of IstoE magazine showed Neves leading President Dilma Rousseff 52.4 percent to 36.7 percent.

“The political debate tends to remain the main driver for currency trading,” Deives Ribeiro, a foreign-exchange manager at Fair Corretora de Cambio e Valores in Sao Paulo, said by phone. “Investors liked to see Neves ahead of Rousseff.”

The Aussie rose versus all except one of its 31 major counterparts as a Chinese report showed imports increased 7 percent last month from a year earlier, compared with the median estimate for a 2 percent decline. China is Australia’s largest trading partner.

The currency gained 1 percent to 87.72 U.S. cents after sliding to 86.43 cents on Oct. 3, the lowest since July 2010.

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