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Forex Exchange Sees Dollar Drop

The forex exchange industry saw the dollar drop to seven-month lows against the euro on Wednesday, as a stronger-than-expected rise in core U.S. consumer prices failed to shake the market`s view that interest rate rises are ending soon. That outlook was further bolstered on Wednesday by comments from San Francisco Federal Reserve President Janet Yellen.

Yellen said that with U.S. growth expected to slow, and inflation expectations contained, the Fed is pretty close to being done with its string of rate increases - which proved both reassuring to some proponents of forex exchange, and disconcerting to others. The euro`s recovery against the dollar and the greenback`s strength against the yen were supported by the European common currency`s rally to a record high against the yen, to 145.45 yen per euro.

"On balance, she was pretty consistent with the tenor and tone of the FOMC minutes. This is consistent with the idea of a pause at 5 percent," said Alan Ruskin, chief international strategist at RBS Greenwich Capital. Against the Swiss franc, the dollar fell 0.2 percent to 1.2662 francs. Forex exchange rates took into account that the dollar climbed as high as 1.2760 francs after Yellen`s report, though it traded at a three-month low of 1.2666 francs prior to its release.