* Dollar index hits 15-mth low, stung by U.S. rate view
* Sterling slides after BoE comments on pound weakness
* Australian dollar hits 15-mth high vs U.S. dollar
(Updates prices)
By Naomi Tajitsu
LONDON, Nov 11 (Reuters) - The dollar extended its recent
decline to a 15-month low against the major currencies on
Wednesday, hurt by a mixture of downbeat official views on its
home economy and bullish signs for Asia and risk appetite.
Federal Reserve officials on Tuesday [] said
any recovery in the U.S. economy would be erratic, bolstering
the view that interest rates would stay low and undermining the
dollar from the start of European trading.
Sterling fell broadly, stung after Bank of England Governor
Mervyn King said weakness in the currency would help UK
exporters and aid Britain's recovery from recession.
Despite its gains versus the pound, the dollar index hit
74.774, its lowest since August 2008, also hurt by strong
Chinese economic data that boosted shares and spurred investors'
appetite for risk -- generally a negative trend for the dollar.
"It's a continuation of the theme where the view for loose
U.S. (interest rate) policy for longer is weighing on the
dollar," said Paul Robson, strategist at RBS in London.
By 1225 GMT, the dollar index <.DXY> traded 0.2 percent
lower on the day at 74.872.
The euro <EUR=> was up 0.4 percent at $1.5040, close to the
day's high of $1.5048, according to Reuters data.
Sterling <GBP=D4> was down half a percent on the day at
$1.6650, having earlier fallen around a cent and a half to the
day's low of $1.6635 as the BoE governor emphasised the need for
the UK economy to rebalance away from imports to exports, and
that a weaker pound would help achieve this. []
King spoke after the central bank issued its quarterly
inflation report, which said UK inflation would be below target
in two years' time if interest rates rose gradually from
mid-2010, as expected by the market []
RISK APPETITE RISES
"Most importantly, he refused to rule out an end to
quantitative easing and said there's no limit at all on the
program," UBS currency strategists said of the BoE governor.
"Clearly King favours a weak pound and we still hold the
view that policy uncertainty may restrict sterling's expected
gains based on valuation adjustments," they added.
European shares <> climbed 1 percent on the day,
taking a cue from a rise in Asian stocks on the back of strong
Chinese manufacturing data which showed the export-driven
economy was maintaining its recovery. []
That also helped prod the high-yielding Australian dollar to
a 15-month high against the U.S. dollar, whose safe-haven appeal
tends to diminish when risk demand rises.
The Aussie was up slightly at $0.9315 <AUD=D4>, having
earlier traded at $0.9345, its highest since August 2008. The
commodity currency was also boosted after gold prices rallied to
a record high <.XAU>, while oil prices rose.
Currencies including the Australian dollar have been rising
against the U.S. currency, which has been stung by expectations
for low rates while those in Australia and elsewhere rise,
increasing the returns on their assets.
The dollar was flat against the yen at 89.85 yen. The yen
was little moved after China said it would refer to changes in
capital flows and fluctuations in major currencies when guiding
the value of the yuan <CNY=CFXS>, marking a departure from past
language on the currency, which is pegged to the dollar.
(Editing by Patrick Graham)
