The dollar fell today versus several higher-yielding currencies after speculations from Fed key-members suggested that interest rates in the country may remain at a record low for an extended period, declining attractiveness for the U.S. currency since investors can opt for higher returns in assets overseas.

After Federal Reserve Bank of St. Louis President James Bullard affirmed that interest rates in the United States may not start to be hiked until the beginning of 2012, foreign-exchange markets reacted instantly to such declaration pushing the dollar rates down versus the euro, paring previous gains for the greenback and also losing versus its Canadian counterpart, with a better rates hikes prospect for 2010. The Chilean currency extended its record high even further versus the greenback, in an extremely long winning streak that the peso to the highest price in almost 16 months.

Most of analysts remain rather unmotivated regarding the future of the U.S. dollar, as public debt remains high in the country and several other reasons are likely to slow down the recovery in the country compared to other wealthy nations, adding to the pessimism brought today by Bullard’s statements. The dollar is likely to remain under pressure, for an undetermined amount of time.

EUR/USD traded at 1.4943 as of 15:11 GMT from a previous rate of 1.4826 yesterday. USD/JPY remained in neutrality trading at 89.19.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.