FOREX-Dollar rises against euro, TIC data supports
(Adds data, updates prices)
NEW YORK Dec 17 (Reuters) - The dollar rose against the euro on Monday, boosted by year-end transactions and speculation of less aggressive Federal Reserve interest rate cuts after last week's U.S. inflation numbers.
The greenback was also supported by an unexpected surge to $114 billion in U.S. long-term capital inflows in October, sharply higher than September's inflows of $15.4 billion.
"It's clear that private foreign investors' appetite for U.S. assets improved in October relative to August and September ... but the outlook deteriorated for U.S. assets in general by the time we got to November," said Greg Anderson, senior foreign exchange strategist at ABN AMRO in Chicago.
In New York morning trade, the euro traded down 0.3 percent at $1.4370 EUR=, after earlier dipping to 1-1/2 month low of $1.4332 in overseas trade.
"The main driver appears to be some position squaring that has turned into a powerful short-covering squeeze and has prompted technical and momentum traders to play the dollar from the long side," FX strategists at Brown Brothers Harriman wrote in a note.
"It also appears that some real money accounts have joined speculators by reducing short-dollar hedges amid consensus forecasts for the greenback having been lifted."
The dollar fell 0.2 percent to 113.18 yen JPY=, hurt by falling U.S. equities. Investors sold stocks on worries that rising inflation and signs of weak holiday retail sales would further darken the economic outlook for the world's largest economy.
Risk appetite was subdued as major central banks prepared to put into practice measures announced last week to help boost liquidity in cash-strapped money markets.
The U.S. Federal Reserve is due to offer the first $20 billion of 28-day funds through its Term Auction Facility on Monday, with the European Central Bank and the Swiss National Bank also offering cash. (Additional reporting by Kevin Plumberg) (Reporting by Lucia Mutikani; Editing by Tom Hals)
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