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Dollar suffers as traders rule out Fed stimulus exit

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The dollar struggled near a nine-month low on Wednesday after weak payrolls data prompted investors to all but rule out a cut in U.S monetary stimulus before next year.


The dollar index fell near this year's trough of 78.918 set in early February, but recovered slightly to trade flat near 79.30.It touched a two-year low versus the euro around $1.38, pushing the single currency to a two-year peak against its trade-weighted basket. The euro's steep ascent could cause concerns among European policymakers.

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Against the yen, the euro fell by nearly one percent to near 134 yen, after having touched a four-year high of 135.52 yen on Tuesday.

The U.S. currency also extended losses against the yen- generally used as a safe haven by investors in times of political and economic uncertainty - as a drop in regional shares dented sentiment in Asia. The pair traded above 97 yen in early dealings.

Delayed data on Tuesday showed U.S. employers added far fewer workers than expected in September, suggesting the economy may have lost some momentum even before the 16-day government shutdown in Washington.

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