Dollar rally ends against major currencies

NEW YORK—The dollar Monday took a breather from recent gains, falling against most major currencies after comments from US Federal Reserve officials suggested the central bank would not immediately end its accommodative stance.

Near 21450 GMT, the euro bought $1.3124, up a tick from $1.3122 late Friday.

The dollar dipped to 97.74 yen compared with 97.87.

The dollar fell against the Swiss franc and the British pound.

The euro traded at 128.28 yen, down from 128.45.

The US economic calendar was thin Monday, but remarks by a number of Federal Reserve officials reverberated through the market.

The dollar has moved higher against other currencies since Federal Reserve Chairman Ben Bernanke signalled Wednesday the Fed was likely to scale back its bond-buying program in the coming months.

Dallas Federal Reserve Chairman told a London event the Fed was not exiting accommodative policy, only scaling it back, Dow Jones Newswires reported.

David Song, currency analyst at DailyFX, said the euro drifted higher after New York Federal Reserve President Bob Dudley’s “rather cautious” tone on the US economy.

Dudley’s speech in Switzerland emphasized that the Fed has a strong interest in ensuring financial stability.

But Song predicted the euro’s rally could be short-lived as European leaders prepare for a summit later this week.

The European Central Bank faces increased pressure to “shore up the ailing economy,” he said, leading to possible easing in the second half of 2013.

“The ongoing turmoil in the euro-area may continue to drag on the exchange rate,” Song said.

Kathy Lien, managing director at BK Asset Management, said Monday’s retreat in the dollar did not spell the end of the dollar’s rally.

“There were no fundamental drivers behind the reversal in the greenback outside of exhaustion,” Lien said.

The pound rose to $1.5437 compared with $1.5418 Friday.

The dollar also fell against the Swiss franc, declining to 0.9329 from 0.9339.