Dollar under pressure in London

The dollar came under broad selling pressure on Wednesday, with investors pushing it towards key lows against the euro, the Swiss franc and a basket of currencies on more signs pointing to US monetary easing. The euro hit $1.40 in European trade and looked set to challenge its eight-month high at $1.4030 after Federal Reserve minutes on Tuesday reinforced expectations of more quantitative easing.
Dealers said hawkish comments on Tuesday from European Central Bank Governing Council member Axel Weber highlighted the difference in direction between Fed and ECB policy, giving the euro an added lift. The euro struggled to sustain a move above the key psychological $1.40 level, however. A firm break above $1.4025-45, particularly a weekly close above $1.4030, was seen heralding further gains.
At 1137 GMT, the euro was up 0.3 percent at $1.3969 after earlier briefly peeping above $1.40 on steady buying by Asian central banks, but traders and analysts said stops and options barriers at that level were helping cap gains. The single currency gained across the board, climbing against the yen, sterling and the Swiss franc. The dollar index was down 0.35 percent at 77.093, not far from a nine-month low of 76.906 set last week. It has shed more than 4 percent since the Fed's last meeting on September 21.
The dollar also eased to a record low of 0.9546 Swiss francs while the Australian dollar was at $0.9883, edging back towards last week's 28-year high of $0.9918. Minutes of the Fed's September 21 meeting showed officials thought the struggling US recovery might soon need more help and they discussed ways to provide it, including adopting a price-level target and buying longer-term US government debt.
The market has gone very short of dollars on QE expectations recently and some analysts say this raises the risk of a rebound, particularly if the Fed opts for a much smaller QE programme than the $1 trillion in asset purchases some forecast. The dollar was steady against the yen at 81.79 yen, supported by nervousness that Japanese authorities could intervene the closer it gets to its record low of 79.75 yen. The dollar hit a 15-year low of 81.37 yen on Monday.