FOREX-Dollar stuck near 15-mth lows on benign rate view
* Dollar off lows, but downtrend intact
* USD-funded carry trades likely to gather momentum
* Aussie slips after RBA minutes
* Market awaits comments from Obama and Hu at presser
By Anirban Nag
SYDNEY, Nov 17 (Reuters) - The U.S. dollar was off 15-month lows on Tuesday, but its broad downtrend was intact after senior Federal Reserve officials reinforced a view that U.S. rates would stay low for a while, giving dollar funded carry trades a boost.
Federal Reserve Chairman Ben Bernanke signalled U.S. rates will stay at zero for some time in a New York speech. He also gave lip service to a strong dollar but did not promise any particualr support for it [ID:nN16581813].
"He is telling us that despite the greenback's rapid decline, despite a rapid increase in risk appetite and the 'cross-currents' to inflation this represents, despite all that we are going keep rates at an exceptionally low level for an extended period," said Adam Carr, senior economist at ICAP.
"The Fed has no intention of pre-empting anything looking forward, or risk managing anything."
The euro EUR= edged lower to $1.4955, off a high of $1.5015 struck on Monday, as it ran into some profit booking in the Asian session. The dollar index .DXY =USD was up 0.1 percent at 74.99, but only just off a 15-month low of 74.679.
The index seemed to have found some support around the 74.75 level for now. Still, a decisive break below this level could be crucial since it would raise the risk of a disorderly decline in the dollar. Also, a daily and weekly close below that level could result in a renewed bout of weakness.
The yen JPY= held ground around 89 per dollar, with major resistance seen around the 88.40 mark. It has gained more than 0.7 percent in the previous session.
"U.S. market rates dropped overnight across the board and that weighed on dollar/yen," said Tomoko Fujii, senior currency strategist at Banc of America Securities-Merrill Lynch in Tokyo.
The market was also looking at launches of Japanese mutual funds on Tuesday, with several new funds focusing on overseas assets and offering choices of foreign currencies such as the South African rand, the Australian dollar and the Brazilian real.
"These should serve as a temporary yen negative," said Fujii. "But the underlying story hasn't really changed, so the dollar/yen should be set for an eventual testing of the October low of 88.01."
Richard Fisher, president of the Dallas Fed, said the dollar's decline so far has not been disorderly. He said the commitment to keep rates low for an extended period can create the potential for carry trades and that the Fed was fully aware of this risk. [ID:nN16518637] Continued...

