On Wednesday the dollar fell against most major currencies as dealers took profits on the currency’s biggest rise in three weeks, having fresh data doing little to change the view that U.S. interest rates will remain at record lows well into 2010.

Slightly higher-than-expected U.S. inflation

Two reports that has showed slightly higher-than-expected U.S. inflation and a slide in new home construction has aided to cap euro gains below $1.50.

Reason why dollar’s longer-term declining trend remains intact

It is said by most dealers that the dollar’s longer-term declining trend remains same due to the reason that, though the Fed may be in the very early stages of withdrawing its huge stimulus measures, it is still nowhere near raising interest rates from record lows.

Euro and Dollar

The euro rose 0.6 percent to $1.4960 EUR=, which has fell down from a session peak of $1.4977. The dollar dropped 0.2% to 89.19 yen JPY=.

Euro and Sterling

Sterling dropped 0.2 percent to $1.6789 GBP= while the euro raised up to 0.8% at 89.13 pence EURGBP=.

U.S. President Barack Obama’s visit to China

Traders has also digested U.S. President Barack Obama’s visit to China, where on Wednesday he had talks with Premier Wen Jiabao, although any near-term changes in Beijing’s foreign exchange policy is expected by few.

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