LONDON (SHARECAST) - The dollar and yen were broadly weaker against major rivals on Wednesday as confidence about a speedy economic recovery fuelled risk appetite. Investors cheered upbeat comments from the Fed’s latest meeting while good figures from bellwether Intel added to the surge in optimism. The dollar index, which measures the currency against six others, fell 1% to a four week low. The dollar was up 0.8% to 94.35 yen in late US trading while the euro added 1% to $1.4111. The combination of upbeat results from Intel, Johnson & Johnson and Goldman Sachs, mostly upbeat comments from the Fed and encouraging US economic data, lifted the outlook for the markets and encouraged investors to increase their exposure to higher risk equities and commodities. Sterling jumped against the dollar and yen on a broad increase in risk appetite. The pound rose 0.6 % to $1.6414 despite gloomy UK jobs data. UK unemployment increased by a record 281,000 in the three months ended May, official figures showed. UK unemployment rose to 2.38m in the three months period while the jobless rate increased to 7.6% in the same period, the highest in more than 12 years. Disappointing euro-zone data also failed to dent appetite for the euro. The euro-zone consumer price index rose 0.2% in June, as expected, however the annual rate of growth fell to -0.1%, the first contraction since records began over ten years ago.

Source