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FOREX-U.S. dollar slides as stocks, commodities firm

Published 09/10/2009, 01:56 PM
Updated 09/10/2009, 02:03 PM
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* Euro hits fresh 2009 high, dollar index near 1-yr low

* U.S. weekly jobless claims fall

* Strong U.S. 30-year auction boosts risk appetite

* BoE holds quantitative easing, rates steady (Recasts; updates prices, adds details, changes byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, Sept 10 (Reuters) - The U.S. dollar fell for a fourth straight session on Thursday, hitting its lowest level in nearly a year against a basket of major currencies, as gains in stocks and commodities prompted investors to wade into riskier currency trades.

The dollar's sell-off also propelled the euro to a fresh 2009 high on Reuters and sterling to a one-month peak.

A surprisingly well-received U.S. 30-year Treasury debt auction further lifted the market's optimism, dousing concerns about financing the country's gargantuan debt.

Foreign and institutional investors further showed strong appetite for U.S. debt accounting for nearly 47 percent of sales.

"Commodities and stocks have turned around and things are getting a little better so we're seeing the dollar being sold off," said Steven Butler, director of currency trading at Scotia Capital in Toronto. "I think it's pedal to the metal until $1.4650 in euro/dollar."

The U.S. currency has suffered recently as investors bet on an economic recovery, with investors buying commodity-linked and higher-yielding currencies, which rallied earlier this week.

In early afternoon trading, the euro rose 0.2 percent to $1.4586 after climbing to $1.4613, its highest since December 2008. The euro zone's single currency also gained earlier after data showed the number of U.S. workers filing new claims for jobless benefits fell last week to 550,000, more than expected.

The ICE Futures' dollar index, which tracks its performance against a basket of six other major currencies, fell 0.4 percent to 76.807. The index earlier touched 76.720, its lowest level since late September.

Dollar gains came as Wall Street stocks rose. The S&P 500 was up 0.6 percent while gold, which has been on a tear this week, traded near $1,000 per ounce.

Against the yen, the dollar was down 0.4 percent at 91.69 yen, after hitting a seven-month low of 91.45 yen earlier, according to Reuters data.

Sterling, meanwhile, rose after the Bank of England left monetary policy unchanged as expected, countering speculation of further easing. The pound hit a one-month high at $1.6677 and was last at $1.6656, up 0.7 percent.

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