* Fed's Bullard reaffirms low interest rates view
* ECB's Trichet, Paramo talk about exit strategy
* Dollar rises from 6-week low vs yen; Aussie, kiwi gain
* U.S. existing home sales surge 10.1 pct in Oct.
(Updates prices, adds comment, changes byline)
By Wanfeng Zhou
NEW YORK, Nov 23 (Reuters) - The dollar fell against a
basket of currencies on Monday after comments from a Federal
Reserve official reinforced expectations U.S. interest rates
would stay low for some time.
A rally in stock markets and gains in gold and oil prices
also dented safe-haven demand for the dollar and lifted
commodity-linked currencies like the Canadian and New Zealand
dollars.
St. Louis Federal Reserve President James Bullard on Sunday
said the Fed should keep alive its mortgage-related assets
purchase program beyond a planned end date to stimulate the
economy. Investors saw the Fed keeping wider monetary policy
accommodative for the foreseeable future. See []
"Risk appetite is back ... with stocks up globally," said
John Doyle, foreign-exchange strategist at Tempus Consulting in
Washington. "Also weighing on the dollar was speculation that
the Federal Reserve will keep stimulus measures in place for
longer than many expect, ensuring that interest rates remain
virtually zero," he added.
Low rates would limit returns on many U.S. investments,
prompting investors to diversify out of the greenback and seek
other riskier currencies and assets with higher yields.
In afternoon trading, the euro was up 0.7 percent at
$1.4969 <EUR=>, after hitting a session high of $1.5001,
according to Reuters data. The euro has struggled to stay above
$1.50 in recent weeks.
Analysts said moves were exacerbated by thin liquidity with
Tokyo markets shut and ahead of Thursday's U.S. Thanksgiving
holiday.
The euro <EURJPY=R> rose 0.9 percent to 133.34 yen. The
dollar gained 0.2 percent to 89.08 yen <JPY=> after hitting a
six-week low of 88.58 yen, according to Reuters data.
An industry report showing U.S. existing home sales jumped
to a more than 2-1/2-year high in October further spurred risk
appetite and pressured the dollar. See [].
"The (housing) data adds to bearish U.S. dollar momentum,
as stronger-than-expected home sales data is bullish for equity
markets," said George Davis, chief technical strategist at RBC
Capital Markets in Toronto.
ECB TO EXIT BEFORE FED?
In contrast to the Fed's stance, both the European Central
Bank's president, Jean-Claude Trichet, and executive board
member Jose Manuel Gonzalez Paramo discussed plans for the ECB
to exit its quantitative easing strategy.
On Monday in Madrid, Trichet said as the situation becomes
more normal, the focus in the medium term calls for a "gradual
and timely phasing out of these measures." []
Paramo said on Sunday the ECB could detail plans for
phasing out its quantitative easing at the December meeting.
[].
Their remarks have boosted the view the ECB is likely to
exit its easing strategy ahead of the Fed, underpinning the
euro against the dollar.
The euro was also supported after a survey showed the euro
zone's service sector grew at its fastest pace in two years in
November, suggesting an economic recovery will continue in the
fourth quarter, albeit at a slower rate. []
The ICE Futures dollar index <.DXY>, which tracks the
greenback against six major currencies, dropped 0.7 percent to
75.132, off a two-week high of 75.879 hit on Friday.
Gold hit record highs and oil rose, benefiting
commodity-linked currencies. The Australian dollar <AUD=> rose
0.9 percent to US$0.9238 and the New Zealand <NZD=> dollar
jumped 1.3 percent to US$0.7329. The Canadian dollar <CAD=>
also advanced, with the greenback down 1.4 percent at
C$1.0552.
(Additional reporting by Gertrude Chavez-Dreyfuss; Editing by
Andrew Hay)
((wanfeng.zhou@thomsonreuters.com; +1 646 223 6304; Reuters
Messaging: wanfeng.zhou.reuters.com@reuters.net))
