Source AP ©

Dollar falls in Asia as U.S. indicators fan speculation for lower U.S. interest rates

The dollar fell in Asia Wednesday after data about the American economy indicated lower U.S. interest rates may be ahead.

The dollar was trading at 118.76 yen midafternoon, down from 118.95 yen late Tuesday in New York. The euro rose to US$1.3584 from US$1.3549.

Although the euro continued to be strong, some traders said a correction phase may start soon, and the euro may stop its rapid ascent.

"There is a notion that the euro's recent gains against the yen were a bit excessive," said Saburo Matsumoto, a senior trader at Sumitomo Trust and Banking Co.

The dollar got sold after consumer price and industrial data Tuesday underscored the likelihood that the next move in U.S. interest rates will be downward. The overall CPI was up 0.6 percent last month, the biggest jump in 11 months, but core inflation, which excludes volatile energy and food, posted a tiny 0.1 percent rise last month, the smallest increase in three months.

Hiroshi Imaizumi, a senior trader at Resona Bank, said the dollar could fall to the upper 117 yen levels.

The dollar was mixed against other regional currencies, gaining to 41.910 Indian rupees from 41.70 the previous day, while dipping to 9,072 Indonesian rupiah from 9,090. It climbed to 47.705 Philippine pesos from 47.650.