Dollar falls broadly in Asia

The dollar fell broadly on Wednesday, marking a fresh nadir against the Swiss franc and a 29-year trough against the Australian dollar as investors expect no surprises from the US Federal Reserve's policy meeting later in the day while the Japanese yen was dented after Standard and Poor's cut its rating outlook on Japan.
Many traders expect the dollar's index against a basket of currencies to eventually descend to an all-time low hit in 2008 of 70.698 after it marked a new three-year low on Wednesday, pummelled by wide-spread expectations that the US Federal Reserve will not rush to tighten policy even after the likely termination of its asset purchase programme in June.
The dollar index last stood at 73.580, after having fallen as low as 73.493 at one point, down close to 10 percent from its peak in January. The euro flew to a high of $1.4715 after breaking above $1.47 for the first time since December 2009. It was last at $1.4685. The dollar slumped to an all-time low around 0.8669 Swiss francs. The Japanese yen dipped from a one-month high after S&P cut the outlook on its Japan rating to negative from stable, citing rising costs from disaster relief efforts, although traders think the impact will be limited.
Although the yen fell briefly to 81.78 yen per dollar, many traders expect the impact of the rating firm's move to be short-lived as a similar step by Moody's in February had no lasting impact. Earlier, the yen rose to a one month-high of 81.27 per dollar.
The dollar's latest fall came even as yield spread between two-year US and German bonds have held mostly steady in the past couple of weeks. The currency market took little notice of skyrocketing Greek bond yields as talk of potential debt restructuring swirls, which in turn pushed up Spain's short-term borrowing costs.
Nor the comment from US Treasury Secretary Timothy Geithner on Tuesday that a strong dollar will always be in US interests largely fell on deaf ears. With the greenback already under so much pressure, some traders said the dollar could see a short squeeze if the Fed did not sound as dovish as what markets are braced for in the near term. A sharp fall in silver this week served as a reminder on the possibility of such a setback. The high-flying Aussie dollar reached a 29-year high of $1.0853 after Australian consumer prices jumped.