* Dollar/yen hits 10-month low after Fed minutes
* FOMC minutes: Dollar decline has been "orderly"
* Dollar weak as shares rise, gold hit record high
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By Naomi Tajitsu
LONDON, Nov 25 (Reuters) - The dollar hit a 10-month low
against the yen on Wednesday after Federal Reserve minutes
showed policymakers saw the U.S. currency's recent decline as
"orderly" and reinforced the view interest rates will stay low.
The U.S. currency's latest bout of weakness came as European
shares rose in early trade and gold prices hit a record high,
underlining the trend for investors to diversify investments
away from the dollar and into other asset classes.
Minutes from the U.S. central bank's November meeting showed
policymakers increasingly confident the U.S. economy is
improving, but did not change the market's view that U.S. rates
will stay essentially at zero until around mid-2010.
[].
They also showed the central bank saw the dollar's fall
against major currencies since March as "orderly", which
analysts said would further persuade the market the U.S.
currency would stay relatively weak.
"When the Fed says the dollar's decline has been 'orderly'
... they're implicitly saying this is not something they will do
anything about," said Johan Javeus, chief currency strategist at
SEB in Stockholm.
By 1003 GMT, the euro had risen 0.5 percent to $1.5037, off
the day's high of $1.5044. The single currency edged closer to
$1.5064, hit last month, its highest since August 2008.
The dollar fell 1.1 percent to 87.57 yen, according to
Reuters data, its lowest since January, when it hit a 13-year
low of 87.10 yen, Dollar selling accelerated after stop-loss
orders were triggered as it fell through the key 88 yen level.
The dollar index <.DXY>, which measures its performance
against a basket of six currencies, fell 0.6 percent to 74.631.
ORDERLY DOLLAR FALL
European shares <> rose 0.7 percent, while gold <XAU=>
climbed as high as $1,179.80, hitting an all-time high.
The Australian dollar <AUD=D4> was the day's biggest gainer,
rallying 1 percent to the day's high of $0.9284 after bullish
comments from Australia's central bank raised speculation
interest rates will rise in December. []
Movements in the options market are consistent with the
Fed's view that the dollar's decline has been orderly. One-month
euro/dollar implied volatility <EUR1MO=> traded in the low 10
percent region on Wednesday, edging towards the year's low in
the mid-9 percent area hit in September.
Risk reversals, which indicate how volatile a rise or fall
in a currency is likely to be, showed a move lower in the dollar
is not expected to be erratic.
Euro/dollar risk reversals <EUR1MRR=> were at around 0.9
percent in favour of euro puts -- the right to sell the single
currency at an agreed price at a specified time -- indicating
that a rise in the euro against the dollar would be perceived as
being more orderly than a fall.
(Editing by Nigel Stephenson)
((naomi.tajitsu@reuters.com; +44 207 542 5830; Reuters
Messaging: naomi.tajitsu.reuters.com@reuters.net))
