FOREX-Dollar slide to two-year low vs euro on Fed outlook
* Euro hits 2-year peak of $1.3825, but may struggle to gain further
* Dollar weak on steady Fed policy expectations, lower U.S. yields
* Chinese data briefly boosted Australian dollar
By Wanfeng Zhou
NEW YORK, Oct 24 (Reuters) - The dollar fell to a two-year low against the euro on Thursday on expectations the U.S. Federal Reserve will continue its bond purchases well into next year.
The euro shrugged off disappointing data showing the pace of growth in euro zone business unexpectedly eased this month. Talk of heavy buying by central banks in Asia also boosted the common currency.
A shutdown of the U.S. government earlier this month and weaker-than-expected September jobs data fueled concerns about the economy. A Reuters poll showed a majority of U.S. primary dealers do not expect the Fed to start cutting stimulus until March of next year.
"Regarding the U.S. dollar, we recently moved to a small short position," said Vassilis Dagioglu, head of asset allocation portfolio management at Mellon Capital in San Francisco. Continued...