* Dollar hits 14-month low vs euro
* JPMorgan earnings, rising stocks boost recovery optimism
* Fed minutes suggest U.S. rates to remain low (Recasts, updates prices, adds comment, Fed minutes, changes byline)
By Steven C. Johnson
NEW YORK, Oct 14 (Reuters) - The dollar slumped to a fresh 14-month low against the euro on Wednesday as soaring quarterly profits at JPMorgan Chase boosted market optimism and whetted investor appetite for higher-yielding currencies and assets.
Minutes from the Federal Reserve's last policy meeting showed officials do not consider inflation an imminent threat, undermining the dollar as they suggest interest rates will remain low well into 2010 despite an improved U.S. outlook.
That would dull the dollar's appeal, especially if other central banks start lifting interest rates as growth picks up.
"The minutes have a dovish tilt. The outlook was not as upbeat. The markets are taking this as dollar-negative, as it cements the view that the Fed will hold interest rates for a long time," said Richard Franulovich, senior currency strategist at Westpac in New York.
JPMorgan Chase's $3.6 billion profit helped push the Dow to 10,000 for the first time in a year. Upbeat Chinese trade data also bolstered the view that a world recovery would be led by Asia and commodity-rich countries.
That sent investors into riskier currencies, pushing the euro to $1.4946, its highest level since August, 2008, before it eased to $1.4912, up 0.4 percent, according to Reuters data.
Many in the market see a break above $1.50 in coming days.
The dollar fell 0.4 percent to 89.38 yen and sterling rose 0.4 percent to $1.5990. The commodity linked Australian dollar rose 0.6 percent to $0.9136 and the dollar fell 0.6 percent to 1.0153 Swiss francs.
WHEN WILL THE FED ACT
The Fed minutes came a day after Fed Vice Chairman Donald Kohn downplayed near-term inflation risks, bolstering market views interest rates will remain low and the dollar weak.
Dollar weakness worries many other countries, however, who fear an excessively strong exchange rate will undermine their own recoveries and make their exports more costly.
The euro has gained nearly 20 percent against the dollar this year, and sources told Reuters that euro zone finance ministers may discuss exchange rates at a meeting next week.
Michael Woolfolk, senior currency strategist at BNY Mellon in New York, said improvement in the U.S. and world economies, aided by a rallying stock market, will eventually force the Fed's hand on rates.
He said a Wednesday report showing U.S. retail sales excluding auto purchases rose for a second straight month suggested consumer confidence was improving.
Meanwhile, the better-than-forecast results from JP Morgan and Intel Corp helped push the MSCI all-country world index to a one-year high.
"The normalization process should be quite rapid, and I don't think the Fed is likely to wait as long as they thought to raise rates if the current rebound continues," he said.
In the meantime, however, he said the euro is likely to rise above $1.50 and could hit $1.55 by year end.
(Additional reporting by Nick Olivari and Gertrude Chavez-Dreyfuss; Editing by Andrew Hay)