After another 14-month low overnight, dollar decline eases following subpar bank earnings

Dollar decline takes a break on subpar earnings

NEW YORK — The dollar decline took a slight breather in New York Thursday after its beating earlier this week as bank earnings failed to please.

The 16-nation euro hit a new 14-month high against the dollar at $1.4967 in overnight trading after the Federal Reserve indicated it was in no rush to raise interest rates, but dipped to $1.4922 in morning trading Thursday. On Wednesday, the euro was worth $1.4908.

Meanwhile, the greenback rose to 90.37 Japanese yen from 89.48 yen, while the British pound shot up to $1.6245 from $1.5971. The dollar also moved up to 1.0313 Canadian dollars from 1.0278, but slipped to 1.01450 Swiss francs from 1.0162 francs late Wednesday.

On Thursday, investors weren’t so happy with bank earnings from Citigroup Inc. and Goldman Sachs Group Inc. That helped take markets lower, with the Standard & Poor’s 500 dipping 0.4 percent in morning trading.

The “safe” dollar tends to trade inversely to equities.

Meanwhile, the government said the prices American consumers are paying rose a slight 0.2 percent in September. Over the year, prices dropped 1.3 percent.

That offers some reassurance to those traders worried about future inflation due to Treasury’s huge debt offerings to fill budget deficits and the Federal Reserve’s easy-lending policies. Rising prices eat away at the dollar’s purchasing power.

The government also said those workers filing for first-time unemployment aid fell to the lowest level since early January.

The Fed isn’t expected to raise interest rates as long as unemployment keeps rising. Once the Fed raises rates, analysts say, the dollar may start to recover.

The federal funds rate is currently at a range near zero, among the lowest of the major economies. That means traders are borrowing the buck to buy up other currencies that give better returns, driving down the greenback’s value whenever they make that risky trade.

In other trading, the Australian dollar hit a fresh 14-month high at 92.27 U.S. cents, while the dollar tumbled nearly 2 percent against the South Korean won, which hit its highest point since last September.