* Dollar falls broadly on dovish comments from Fed's Bullard
* Dlr hits 6-week low vs yen; euro rises 0.8 pct vs dollar
* Euro zone PMI figures eyed at 0858 GMT
LONDON, Nov 23 (Reuters) - The dollar fell broadly on Monday
after dovish comments from a U.S. Federal Reserve official added
weight to expectations that U.S. monetary policy would stay
ultra-loose for a prolonged period.
The U.S. currency fell to a six-week low against the yen and
lost around three quarters of a percent against the euro. The
moves were exacerbated by thin liquidity with Tokyo markets
closed and ahead of Thursday's U.S. Thanksgiving holiday.
St. Louis Federal Reserve President James Bullard said on
Sunday that the central bank should keep alive its
mortgage-related asset purchase programme beyond a planned end
date to help stimulate the economy. []
Those remarks contrasted with comments on Friday from
European Central Bank President Jean-Claude Trichet that banks
risked becoming addicted to easy money. Trichet said he would
make sure extraordinary liquidity measures would be phased out
in a timely and gradual fashion. []
"Everyone is looking to the major central banks to begin
their exit strategies, so the market is very sensitive to any
comments on liquidity," said Niels Christensen, currency
strategist at Nordea in Copenhagen.
"Better risk sentiment is also weighing on the dollar, with
equities gaining and commodity prices higher," he added.
Expectations of prolonged low U.S. interest rates and signs
of global economic recovery have kept the dollar in a steady
decline since March.
The euro could garner support as provisional purchasing
managers' indices on the euro zone manufacturing and services
sector sectors due at 0858 GMT were expected to show a further
improvement in activity. <ECON>
Regional figures showed activity in the French private
sector grew at its fastest pace in 37 months in November, though
manufacturing activity growth slowed. []
The equivalent figures for Germany showed German
manufacturing activity expanded for the second month running.
[]
At 0821 GMT, the euro <EUR=> was up 0.8 percent at $1.4971
<EUR=>. Against a basket of currencies, the dollar <.DXY>
dropped 0.7 percent to 75.113, off a Friday high of 75.879.
Against the yen, the dollar fell to a six-week low of 88.58
yen <JPY=>, according to Reuters data.
"The Fed is sounding like they mean it about keeping rates
low for an extended period -- way into 2010 if not 2011," said a
trader at an Australian bank.
"That just added to the dollar's offered tone and it doesn't
take a lot of flow to move currencies when the market is so
thin," he added, noting the absence of Tokyo for a holiday had
made conditions illiquid.
Traders were also encouraged to dump dollars for perceived
riskier currencies as European shares <> rose more than 1
percent, gold prices <XAU=> jumped to record highs and oil
prices <CLc1> gained more than 1 percent.
The higher-yielding and commodity-linked Australian dollar
rose 0.8 percent against the dollar to $0.9222 <AUD=D4> while
the New Zealand dollar was up 0.8 percent at $0.7296 <NZD=D4>
(Additional reporting by Wayne Cole in Sydney and Kevin Yao
in Singapore, editing by Nigel Stephenson)
((jessica.mortimer@thomsonreuters.com; Tel: +44207 542 7817,
Reuters Messaging: jessica.mortimer.reuters.com@reuters.net)
