CORRECTED-FOREX-Dollar tumbles after Fed minutes; Bernanke speech awaited

Wed Jul 10, 2013 3:06pm EDT

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(Adds missing word "not" in second paragraph)

* Dollar falls from three-year high vs basket of currencies

* Fed minutes say more jobs needed before tapering

* Fed Chairman Bernanke to speak at 4:10 p.m. (2010 GMT

By Wanfeng Zhou

NEW YORK, July 10 (Reuters) - The U.S. dollar tumbled against the euro and yen on Wednesday after the minutes from the Federal Reserve's latest policy meeting dented expectations of a near-term reduction in stimulus by the U.S. central bank.

The dollar had rallied to three-year peaks against a basket of major currencies on Tuesday on bets the Fed may start slowing its $85-billion-a-month bond purchases as early as September, but the minutes suggested that might not be a sure bet.

Even as consensus built within the Fed in June about the likely need to begin pulling back on economic stimulus measures soon, many officials wanted more reassurance the employment recovery was on solid ground before a policy retreat.

"The minutes were not as hawkish as expected," said Joseph Trevisani, chief market strategist at WorldWideMarkets, Woodcliff Lake in New Jersey.

The euro rose 0.9 percent to $1.2891, having risen to a session peak of $1.2945 after the release of the minutes, according to Reuters data.

The dollar fell 1 percent to 100.18 yen after reaching a session low of 99.62 yen.

Analysts at Action Economics said the minutes injected uncertainty back into the markets rather than provide clarity, as reflected by the gyrations in asset prices on the headlines.

They said dollar losses accelerated as investors looked ahead to a speech by Fed Chairman Ben Bernanke at a National Bureau of Economic Research conference at 4:10 p.m. (2010 GMT). A question-and-answer session will follow his speech.

"It appears dollar longs are now cutting positions ahead of Bernanke's speech, where he won't likely contradict the minutes," they wrote to clients.

The dollar index, which tracks the greenback against a basket of six currencies, was last down 0.7 percent at 83.975, moving away from a three-year high at 84.753 touched on Tuesday. (Additional reporting by Nick Olivari; Editing by James Dalgleish)

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