RTRS: Dollar slides as JPMorgan adds to recovery optimism
The dollar slid to a 14-month low against a basket of currencies and the euro on Wednesday, dented as solid JPMorgan Chase results, rising equities and commodities stoked optimism about an improving global economy.
JPMorgan Chase & Co (JPM.N) reported a sharp rise in third-quarter results as underwriting revenue at its investment bank offset deeper losses on credit cards and other consumer loans.
The buoyant results followed forecast-beating earnings from Intel Corp (INTC.O) late on Tuesday and upbeat Chinese trade data on Wednesday, all of which helped brighten the economic outlook and encouraged investors to move into perceived riskier and higher-yielding currencies.
The U.S. dollar meanwhile remained under broad selling pressure on the view that U.S. interest rates will stay at very low levels for some time.
"Anything that points to a global recovery is hurting the dollar at the moment," said James Hughes, market analyst at CMC Markets.
"The JP Morgan results were pretty good and that has helped drag it lower still," he added.
The better-than-forecast results from JP Morgan and Intel Corp helped push the MSCI all-country world index .MIWD00000PUS to a one-year high.
By 1150 GMT (7:50 a.m. EDT), the euro had hit $1.4921 according to trading platform EBS, its highest since August 2008.
Many in the market see the euro climbing higher and some analysts see a break above $1.50 in coming weeks.
The dollar index .DXY, which tracks the dollar's value against a basket of currencies, slid to 75.436, a trough last seen in August 2008. The Swiss franc rose to around 1.0167 francs versus the dollar, its highest since July 2008.
The Australian and Canadian dollars also hit their strongest since August 2008, while the Norwegian crown rose to its firmest since September 2008 as U.S. crude oil prices jumped to a 2009 high and gold to a record high.
NEGATIVE DOLLAR SENTIMENT
Analysts said negative dollar sentiment was the day's main driver, adding that data showing a 0.9 percent month-on-month rise in euro zone output offset a poll showing a fall in German sentiment on Tuesday.
"Today's data eased some concerns about the euro zone economy after yesterday's weak ZEW survey," said Jeremy Stretch, strategist at Rabobank in London, adding that this had helped to prod the euro higher.
Also pressuring the dollar were comments from Federal Reserve Vice Chairman Donald Kohn, who on Tuesday said the economy would not snap back quickly from its deep recession, bolstering the view for low U.S. rates.
