BRUSSELS (Alliance News) - The US dollar extended decline against its key counterparts in European deals on Wednesday, as subdued inflation data from China intensified worries about global economic growth, reinforcing hopes that Federal Reserve will delay hiking its key interest rate. With food prices coming down, China's consumer inflation eased more than expected to 1.6% in September versus 2% in August. The producer price index extended its slide to a 43rd straight month, underlying sagging demand and heightening fears over a slowdown in the world's second largest economy. Coupled with the sharp decline in Chinese imports yesterday, the data exacerbated worries about global economy, with expectations diminishing over a Fed rate hike this year. Investors are now await US retail sales data and producer price inflation for September later in the day for clues about the outlook of monetary policy. The consumer price index is slated for Thursday, while consumer sentiment and industrial production are scheduled for Friday. The greenback was lower against most major rivals on Tuesday, as weak economic data across the globe clouded uncertainty over Fed rate hike view. It fell % 0.48 against the franc, 0.25% against the yen and 0.18% against the euro. The currency has been lower in the Asian session as well. In European trading, the greenback depreciated to 119.42 against the Japanese yen, its lowest since October 2, and was down by 0.26% from yesterday's closing value of 119.73. If the greenback-yen pair continues slide, it may locate support around the 118.00 mark. Data from the Conference Board showed that Japan's leading economic index rose 0.2% in August, following the 0.1% decline in July. The positive contributors to the index include the business failures, real money supply, the six-month growth rate of labor productivity, real operating profits, the Tankan business conditions survey, the index of overtime worked, dwelling units started, and the yield spread. The greenback slipped to near a 4-week low of 1.1427 against the euro, compared to 1.1379 hit late New York Tuesday. On the downside, 1.15 is possibly seen as the next support level for the greenback. Data from Eurostat showed that Eurozone industrial production declined at the fastest pace in a year in August. Industrial output fell 0.5% in August from prior month, reversing a revised 0.8% rise in July. This was the biggest fall since last August, when output fell 1%. Economists had forecast a 0.5% fall. The greenback fell to 0.9549 against the Swiss franc for the first time since September 18. At yesterday's close, the pair was valued at 0.9577. The greenback is seen finding support around the 0.945 level. Swiss investor confidence continued its rising trend in October to reach its highest level since early last year, as financial markets experts view on the current economic situation improved, according to survey data from the Centre for European Economic Research/ZEW. The ZEW-Credit Suisse indicator for Switzerland rose 8.6 points to reach 18.3 points in October, the Mannheim-based think-tank said. The greenback reached as low as 1.5366 against the pound, coming off from a high of 1.5247 hit at 5:00 pm ET. Further weakness is likely to lead the greenback to a support around the 1.55 region. The pair closed Tuesday's trading at 1.5247. The pound firmed as the UK unemployment rate declined in three months to August and the employment rate hit a record high. Data from the Office for National Statistics showed that the ILO jobless rate fell to 5.4% in three months to August from 5.6% in March to May period. The rate was expected to be at 5.5%. The greenback weakened to 0.6749 versus the NZ dollar, a fresh 3-month low, from an early high of 0.6619. The next possible support for the greenback is seen around the 0.69 area. The pair was worth 0.6638 when it closed Tuesday's trading. The US advance retail sales data and PPI, both for September and US business inventories for August are set to be published in the New York session. Bank of England Chief Economist Andy Haldane is due to give a lecture at the Surrey University in GUILDFORD, England at 1:00 pm ET. An hour later, US Federal Reserve releases is set to release its Beige Book report.

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