Dollar Falls Versus Most Peers on Stocks Before FOMC Minutes; Pound Drops

The dollar dropped against most of its major counterparts as stocks and commodities advanced before minutes of the last meeting of the policy-setting Federal Open Market Committee are released.

Sterling was the worst performer among major currencies as minutes of the Bank of England’s May 5 meeting showed most policy makers said higher interest rates might hinder recovery. South Africa’s rand was the best performer. Federal Reserve Bank of St. Louis President James Bullard said today the bank may tighten policy this year. Fed Chairman Ben S. Bernanke said after the last meeting he was unsure when stimulus would unwind.

“We’re looking for a new trigger,” said Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York. “We’re waiting for the FOMC minutes. We have all these hawkish comments from regional Fed presidents and they weren’t reflected in the statement, and maybe the minutes will shed more light on just how vocal the hawks were at the meeting.”

The dollar fell 0.1 percent to $1.4250 per euro at 1:31 p.m. in New York, from $1.4237 yesterday. It earlier weakened 0.4 percent and gained 0.3 percent. The yen was little changed against the dollar at 81.47 after gaining earlier as much as 0.6 percent. It touched 81.77 yesterday, the weakest since April 28. The Japanese currency fell 0.2 percent against the euro to 116.10 yen.

The Standard & Poor’s 500 Index of stocks, which slid to its lowest level in almost four weeks yesterday, advanced 0.6 percent as risk appetite improved. The Thomson Reuters/Jefferies CRB Index of raw materials climbed 2.4 percent.