* Dollar index falls to 14-month low
* JPMorgan earnings, global recovery optimism dent dollar
* U.S. retail sales data has minimal impact
(Recasts, updates prices, adds detail, adds quotes; changes
dateline, previous LONDON, byline)
By Nick Olivari
NEW YORK, Oct 14 (Reuters) - The dollar dropped to a
14-month low against a basket of currencies and the euro on
Wednesday, dented by expectations that solid JPMorgan Chase
results and rising stock and commodity prices bode well for an
improving global economy.
JPMorgan Chase & Co <JPM.N> reported a sharp rise in
third-quarter results as underwriting revenue at its investment
bank offset deeper losses on credit cards and other consumer
loans. []
The buoyant results followed forecast-beating earnings from
Intel Corp <INTC.O> late on Tuesday and upbeat Chinese trade
data on Wednesday, all of which helped brighten the economic
outlook and encouraged investors to move into perceived riskier
and higher-yielding currencies.
The U.S. dollar meanwhile remained under broad selling
pressure on expectations that U.S. interest rates will stay at
very low levels for some time. Low rates will reduce the
attractiveness of U.S. assets and ease demand for the dollars
to buy them.
"On the back of a solid start to earnings season and strong
trade and loan growth releases from China, investors are widely
seeking risk today," said Camilla Sutton, currency strategist
at Scotia Capital in Toronto in a note to clients. "This has
helped push equities and commodities higher and the USD and
bond prices lower."
In early New York trade, the euro was last up 0.3 percent
$1.4900 <EUR=> after going to its highest since August 2008.
Many in the market see the euro climbing higher and some
analysts see a break above $1.50 in coming weeks.
Against the yen <JPY=>, the dollar fell 0.2 percent to
89.55.
A rally in the dollar against the yen after U.S. retail
sales data showed a smaller than expected decline was
shortlived. [].
"The data was pretty solid across the board. It helps
support the story that the recovery is building steam and that
some of the optimism is justified, although I still don't buy
it," said Brian Dolan, chief currency strategist at Forex.com
in Bedminster, New Jersey.
The yen also drew support from a senior Japanese official
who signaled yen-weakening intervention was undesirable.
[].
SHARES RALLY
The better-than-forecast results from JP Morgan and Intel
Corp helped push the MSCI all-country world index
<.MIWD00000PUS> to a one-year high.
For a graphic on the correlation between euro/dollar and
world stocks, click on
http://graphics.thomsonreuters.com/109/GLB_MKTH1009.gif
The dollar index <.DXY>, which tracks the dollar's value
against a basket of currencies, slid to 75.436, a trough last
seen in August 2008. The Swiss franc <CHF=> rose to around
1.0167 francs versus the dollar, its highest since July 2008.
The Australian and Canadian dollars <AUD=> <CAD=> also hit
their strongest since August 2008, while the Norwegian crown
<NOK=> rose to its firmest since September 2008 as U.S. crude
oil prices jumped to a 2009 high and gold to a record high.
[] []
Analysts said higher share prices would continue to pummel
the dollar on the view that an improving economy would decrease
demand for safe-haven dollars.
"We have seen the correlation between the equity market and
euro/dollar has declined slightly in the past month, but it is
still high by historical standards," said Kasper Kirkegaard,
currency strategist at Danske Markets in Copenhagen.
Also pressuring the dollar were comments from Federal
Reserve Vice Chairman Donald Kohn, who on Tuesday said the
economy would not snap back quickly from its deep recession,
bolstering the view for low U.S. rates. []
(Additional reporting by Wanfeng Zhou in New York and
Jessica Mortimer in London)
(Editing by Theodore d'Afflisio)
