Islam Times - Dollar falls on Russia comments, BRICs awaited

The dollar fell broadly on Tuesday after traders took comments from Russia that the world needs new reserve currencies as a signal that it may be looking to cut the share of U.S. assets in its currency portfolio.

Russian President Dmitry Medvedev's comments on Tuesday preceded a summit of BRICs nations later in the day. [nLG281330]

Market speculation has been rising that countries may be looking to diversify reserves portfolios away from U.S. Treasuries in the future.

The dollar reversed a climb from earlier in the day, when it hit its highest in nearly four weeks against the euro after falling global share prices had increased risk aversion and prompted safe-haven bids for the U.S. currency.

"Stocks had a terrible day yesterday and again today, which had helped the dollar, but the Russia comments before the BRICs meet is weighing on the dollar," said Johan Javeus, chief currency strategist at SEB Bank in Stockholm.

European shares .FTEU3 fell 0.3 percent in early trade, extending steep losses from the previous day, boosting the yen across the board. Markets also awaited a reading of German economic sentiment from the ZEW due at 0900 GMT. Expectations are for a rise in the sentiment index to 35.0 in June from 31.1 in May.

By 0749 GMT, the euro traded 0.6 percent higher around the day's high of $1.3876. The pair recovered from $1.3748 touched on trading platform EBS earlier in the day, its lowest since May 21.

Losses versus the euro helped to push the dollar index .DXY down 0.6 percent.