Dollar weakens

TOKYO: The dollar fell to a three-year low against its peers on Wednesday, losing its earlier bounce as the euro edged back after shaking off a setback to Chancellor Angela Merkel´s chances of forging a "grand coalition" in Germany.

The dollar index against a basket of six major currencies last stood little changed at 90.446 after hitting 90.113, its lowest since December 2014.

The dollar index momentarily recovered to as high as 90.826 on Tuesday after slipping steadily this month on investors´ expectations that major central banks would eventually windback stimulus to normalise monetary policy.

"The view held by many market participants is that monetary policies are headed for normalisation across the globe.

The dollar is bound to stay weak when such views prevail," said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.

The euro was 0.05 percent higher at $1.2266, brushing off weakness seen overnight and going as high as $1.2323 earlier, its strongest since December 2014.

The common currency had slid to $1.2195 on Tuesday after news which suggested the ECB might not tweak its policy message very soon curtailed the currency´s rally.