* Dollar off lows but still in broad downtrend
* Aussie slips after RBA minutes
* China's Hu makes no mention of yuan after Obama meeting
By Anirban Nag
SYDNEY, Nov 17 (Reuters) - The U.S. dollar was off 15-month
lows on Tuesday, but its broad downtrend still looked intact after
senior Federal Reserve officials reinforced a view that U.S.
rates would stay low for a while.
Traders have also been watching U.S. President Barack Obama's
trip to China, although few expect any near-term changes in
Beijing's foreign exchange policy as a result.
At the weekend the United States and China sparred over
exchange rates at a meeting of Asia Pacific leaders, a move
that quashed speculation China may allow some further yuan
appreciation in coordination with Obama's first trip to China.
Chinese President Hu Jintao made no mention of the yuan after
meeting Obama, and the U.S. leader only said he was pleased with
China's commitment on moving towards more market-oriented
exchange rates. []
"Most market players had not expected a surprise comment on
the yuan at this time," said Nobuhiko Akai, senior manager of FX
trading at Bank of Tokyo-Mitsubishi UFJ in Tokyo.
"Although we still need to see how European players will
react, the main interest of market players is on the dollar's
slide and how much more it will fall as the Thanksgiving holiday
approaches, which may prompt dollar buy-backs."
The U.S. Thanksgiving holiday is on Nov. 26.
The euro <EUR=> slipped 0.2 percent to $1.4940, from above
$1.5015 struck on Monday, weighed down early on by profit
booking.
The dollar index <.DXY> <=USD> was up 0.1 percent at 74.95
after striking a 15-month low of 74.679 on Monday, and seemed to
have found some support around the 74.75 level for now.
The yen <JPY=> held ground around 89.07 per dollar, with yen
resistance seen around 88.40, after the dollar dipped to 88.75 on
Monday, nearing October's eight-month low at 88.01.
Federal Reserve Chairman Ben Bernanke signalled on Monday
that U.S. rates would stay at zero for some time. He also
gave lip service to a strong dollar but did not promise any
particular support for it. []
"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."
Richard Fisher, president of the Dallas Fed, said the
dollar's decline so far has not been disorderly although the
commitment to keep rates low for an extended period could create
the potential for carry trades and that the Fed was fully aware
of this risk. []
Fed Vice Chairman Donald Kohn said the low interest rate
policy was meant to encourage investors to move into riskier
assets and there are no signs yet of an asset bubble building
up in the United States. []
The market was also looking at launches of Japanese mutual
funds, 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, for possible
outflows of yen.
The Aussie <AUD=D4> lost height, retreating from 15-month
highs of $0.9407 to $0.9330, after minutes from the Reserve
Bank of Australia's (RBA) last board meeting showed the pace of
further tightening was uncertain. [].
As a result, investors <CSRBA=CSAU> were pricing in about a
60 percent chance of a December rate rise, down from 72 percent
earlier in the day.
(Additional reporting by Charlotte Cooper and Satomi Noguchi in
Tokyo; Editing by Joseph Radford)
