Dollar Down As Risk-sentiment Improves On Hopes Fed To Delay Stimulus Cut

New York (Nov 18)  The US dollar lost ground in early London deals on Monday as traders continued to mull some dovish comments made by the deputed U.S. Fed Chairwoman Janet Yellen at her confirmation hearing before the Senate Banking Committee last week on Federal Reserve's asset purchasing program.

Yellen, the nominee to succeed Federal Reserve Chairman Ben Bernanke, defended the central bank's ultra-easy monetary policy and argued that unemployment remains too high for the Fed to consider significantly scaling back its asset purchase program.

"I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy," Yellen said.

A batch of largely weaker than expected economic data on Friday may have added to optimism that the Fed will leave its stimulus program intact for the foreseeable future, with the U.S. industrial production falling down by 0.1 percent in October after climbing by 0.7 percent in September. Economists had expected production to inch up by 0.1 percent.

A separate report from the New York Fed showed an unexpected contraction in regional manufacturing activity in November, while the Labor Department released a report showing a bigger than expected drop in import prices in October.

Traders' appetite for risk revibrated as China pledged to undertake sweeping economic and social reforms over the next decade. Unveiling a raft of reforms, China on Friday announced plans to allow more private investment in the state sector, build a more and impartial and sustainable social security system and let Chinese companies and individuals make investments offshore more easily.