Reply #9: Dollar slides 1.15%

[EuroObserver]

Dollar slides to fresh 4-month low vs euro
Mon Jan 23, 2006 05:48 AM ET
LONDON, Jan 23 (Reuters) - The dollar extended earlier losses to hit a fresh four month low against the euro on Monday, with sentiment pulled down by comments from a Federal Reserve official on structural weakness that added to a belief that the Fed was near the end of its 18-month credit tightening campaign.

New York Federal Reserve Bank President Timothy Geithner said on Monday that the massive and growing U.S. current account deficit presents a threat to the world economy and an eventual adjustment will not necessarily be gradual.

By 1038 GMT, the euro was up 1.15 percent at $1.2276 against the dollar -- its highest since mid-September.

"The mood on the dollar is currently negative, the comments are playing into it. The market is short dollar and sentiment is weakening," Mitul Kotecha, head of fx research at Calyon, said.

"The Fed is indicating it is comfortable with the current range and the ECB is taking a contrasting stance," he added.