(Recasts, updates prices, adds Fed minutes, comment)
* Fed seems to back away from imminent rate rise-minutes
* Swedish crown hit by signs central bank to cut rates
* Dealers say central bank reserve moves supporting euro
By Gertrude Chavez-Dreyfuss
NEW YORK, April 9 The dollar dropped to more
than two week-lows against the euro and Swiss franc on Wednesday
after minutes of the latest Federal Reserve monetary policy
meeting suggested that the U.S. central bank may not raise
interest rates anytime soon.
The minutes of the Federal Open Market Committee in March
showed that the Fed would wait for a considerable time after
ending a bond-buying program before finally raising rates.
Fed Chair Janet Yellen, at a press conference after the FOMC
meeting defined "considerable time" as "around six months"
depending on the economy. Analysts said the latest minutes
showed that the Fed seemed to back away from that six-month gap.
"The headlines convey that the Fed is not as hawkish as we
thought," said Richard Franulovich, senior currency strategist,
at Westpac in New York.
In early afternoon trade, the euro rose as high as $1.3856
against the dollar, its strongest level since March 24,
and was last at $1.3848, up 0.4 percent.
Against the Swiss franc, the dollar fell to 0.8795 franc
, its lowest level in more than two weeks.
The dollar was flat against the yen, falling following the
Fed minutes, after trading higher for most of the session.
Eric Viloria, currency strategist, at Wells Fargo Securities
in New York added that the Fed minutes affirmed the U.S. central
bank's commitment to maintain an accommodative policy, with its
balance sheet still expanding.
Earlier on Wednesday, the dollar recovered from its largest
one-day fall versus the yen in more than seven months hit on
Tuesday. The greenback's bounce was the first in four days.
"Our view going into 2014 is still a broad-based dollar
rally predicated on the acceleration of the U.S. economy and
rising U.S. rates," said Mark McCormick, currency strategist, at
Credit Agricole in New York.
"A lot of that has been on the back burner given the
murkiness of the U.S. data due to the weather impact. But we
expect that to change and in fact, we're already starting to see
pockets of strength in some of the leading indicators and some
of the survey-based measures."
The Swedish crown, meanwhile, was one of the biggest movers
on Wednesday, falling versus the euro, after the Riksbank
signalled it was moving closer to cutting interest rates.
Dealers from Scandinavian banks said the central bank's
lowering of its projected path for rates opened the way to a
push towards 9.05 crowns per euro, although there would be some
caution ahead of inflation numbers due on Thursday.
The euro rose 0.2 percent against the Swedish crown to
One striking trend on the majors since last week is the
euro's resilience in the face of signals from the European
Central Bank that it is prepared to consider outright money
printing to support growth if need be.
A number of dealers said the euro zone common currency was
being supported by China's need to re-order the balance of
currencies it holds in its reserves after buying billions of
dollars last month to weaken the yuan. Similarly, many pointed
to signs of intervention by South Korean authorities overnight
that may support the euro.
The refloating of the euro zone's struggling southern states
on bond markets, exemplified on Wednesday by Greece's
announcement of its first bond sale in four years, has also
drawn capital back into Europe this year.
(Additional reporting by Michael Connor; Editing by Diane