By Fabio Alves
NEW YORK (Dow Jones) – The dollar extended losses against most rivals Wednesday afternoon after the Federal Reserve signaled economic recovery isn’t strong enough to lift interest rates anytime soon.

The dollar hit intraday lows against the euro and other higher-yielding currencies, including the Australian dollar and U.K. pound, after the release of the Federal Open Market Committee’s minutes from its Dec. 15-16 policy-setting meeting.

“Based on the comments coming out of the minutes, it’s clear that easy money is going to continue to flow,” said Tim Evans, a market strategist at brokerage firm Lind-Waldock in Chicago. The minutes will boost demand for riskier assets, he said.

The Dow Jones Industrial Average is trading in positive territory, while oil and gold are up almost 2%.

Wednesday afternoon in New York, the euro was at $1.4429 from $1.4370 late Tuesday, according to EBS via CQG. The dollar was at Y92.33 from Y91.67, while the euro was at Y133.22 from Y131.74. The U.K. pound was at $1.6021 from $1.5996. The dollar was at CHF1.0261 from CHF1.0336.

The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 77.390 from 77.612.

U.S. Federal Reserve officials last month acknowledged the economy is gaining momentum, but judged the recovery as not being strong enough to change their view that interest rates must stay at a record low.

Minutes of the Federal Open Market Committee’s meeting, which were released with the usual lag Wednesday, showed that central bank officials expect a slow recovery to keep the U.S. labor market weak and consumer prices subdued.

The minutes “meeting showed that monetary policy officials remained surprisingly concerned with the state of the economy and the pace of America’s recovery,” Omer Esiner, senior market analysts at Travelex Global Business Payments in Washington, wrote in a note to clients. “Officials also worried that removal of policy accommodation and the winding down of mortgage-backed asset purchases could undercut tentative housing market improvements.”

-By Fabio Alves, Dow Jones Newswires; 212-416-2204; fabio.alves@dowjones.com

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