Dollar slips broadly in London

The dollar hit a two-week low against the yen and slipped broadly on Wednesday as investors took profit on their carry trades where they had sold low-yielding currencies.
A sell-off in the dollar against the yen led the move in Europe as a lack of major data in the session, coupled with holidays in Japan and the United States on Thursday, prompted broad short-covering. Carry trades have been the major driver of the yen, which hit a 21-year low on an inflation-adjusted, trade-weighted basis in October and a record low versus the euro this week.
"The dollar/yen has done quite well so people are taking profit. We are in an environment right now where people are looking for reasons to sell the dollar. People cite that US growth is slowing and interest rates are coming down," said Daragh Maher, currency strategist at Calyon.
By 1230 GMT, the dollar was down 0.7 percent at the two-week low of 117.06 yen. The euro was down 0.3 percent at 150.83 yen, having hit a record high earlier in the week near 151.70.
The euro was up 0.3 percent at $1.2883. A break of $1.2900 would bring it to levels not seen for three months. The low-yielding Swiss franc also gained, rising around 0.6 percent to 1.2334 francs per dollar. "As we are in the penultimate week of November, people are taking off a few carry trades," said Jeremy Stretch, currency strategist at Rabobank.
Eurogroup chairman Jean-Claude Juncker said the yen's fall in the last few months had been too rough in remarks which some traders said contributed to the yen's rise. The dollar came under pressure on Tuesday as the White House lowered its forecast for US economic growth this year and next, saying the economy was moderating.
Investors shrugged off well-anticipated news that the Japanese government downgraded its assessment of the economy for the first time in almost two years. In its report, the Japanese government said weak consumption cast a cloud over the nation's long-lasting recovery.
But a government official said the economy continues to expand and that meant the current period of growth became the longest post-war expansionary cycle this month, surpassing the so-called Izanagi boom of the late 1960s.
The Bank of Japan is widely expected to raise rates from 0.25 percent by the end of the current fiscal year in March, with some traders seeing the possibility of a rate rise next month if upcoming data is strong.
Traders cited talk the Japanese Ministry of Finance was advising exporters to hedge its dollar holdings or sell dollars but the talk was denied by a MOF official.