NEW YORK, March 22 (Reuters) – The U.S. dollar hit a 15-month low against other major currencies on Tuesday and could extend losses as a resumption in risk appetite spurred demand for currencies that offer higher returns.
Expectations of a euro zone interest rate hike next month lifted the euro to a 4-1/2-month high against the dollar earlier, but gains were capped by a reported options barrier at $1.4250 and a sell-off in euro/sterling following a jump in UK inflation data.
The yen traded in a tight range, hovering around 81 per dollar. In the near term, analysts said the 80 to 80.85 area could serve as a floor as markets remained on alert for further intervention by the Group of Seven nations to counter yen strength.
Global financial markets stabilized after G7 launched coordinated yen-weakening intervention last week and euro zone officials agreed Monday on the setup of the European Stability Mechanism, or a permanent euro zone bailout fund.
“Generally global policymakers and authorities are really opening the door to taking on more risk,” said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto.
The dollar index, a measure of the greenback’s value against a basket of six major currencies, fell 0.2 percent to 75.249 .DXY, the lowest since early December 2009.
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