The US dollar hit its lowest level against the euro in more than 2-1/2 years on Wednesday on doubts about another Federal Reserve interest rate increase this year and expectations for European Central Bank hawkishness. The euro hit $1.1868, its highest level against the dollar since January 2015. In contrast to the political risks and monetary policy uncertainty that have plagued the dollar, the common currency has drawn support from expectations that the ECB would eventually begin phasing out its easy policy.
St. Louis Federal Reserve President James Bullard said he is opposed to further US interest rate increases by the central bank and warned that more hikes could hinder achievement of the Fed's 2-percent domestic inflation goal, Market News International reported on Wednesday. Bullard's comments reinforced skepticism surrounding another Fed rate increase this year, analysts said. Expectations for another Fed rate hike in December last stood at about 48 percent, according to CME Group's FedWatch tool.
The dollar index, which measures the greenback against a basket of six major rivals, was last down 0.2 percent at 92.857. The dollar gained slightly against the yen and was last at 110.46 yen, hovering above a more than six-week low touched Tuesday of 109.91 yen. The dollar was last up 0.4 percent against the Canadian dollar at C$1.2585 after touching a 1-1/2-week high of C$1.2591. The New Zealand dollar touched a one-week low against the greenback of $0.7411.
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