Dollar slips in aftermath of Yellen's dovish comments

By Sam Forgione

NEW YORK (Reuters) - The U.S. dollar hit its lowest level against the euro in nearly seven weeks on Wednesday following dovish comments from Federal Reserve Chair Janet Yellen that pushed out expectations for the central bank's next interest rate hike.

The euro advanced to $1.1364, its highest against the dollar since Feb. 11, while the dollar hit a more than five-month low against the Swiss franc at 0.9592 franc .

The euro pared some gains later in the U.S. trading session and was last up 0.43 percent against the dollar at $1.1338.

The dollar index, which measures the currency against a basket of six major rivals, hit its lowest level in 12 days at 94.588 <.DXY> after posting its biggest one-day percentage decline since March 17 on Tuesday. The index was last down 0.38 percent at 94.802.

The ADP National Employment Report showed U.S. private employers added 200,000 jobs in March, above economists' expectations. The data came ahead of the U.S. Labor Department's more comprehensive March non-farm jobs report on Friday.

While the ADP data beat economists' forecast for 194,000 jobs according to a Reuters poll, the data was not enough to halt the negative sentiment toward the dollar a day after Yellen stressed the need to be cautious in raising rates.

Traders are "trying to digest the dovish (Yellen) comments and assess whether this is a real turning point for the Fed," said Steven Englander, managing director and global head of G10 FX strategy at Citigroup in New York.

The dollar was on track to post its biggest quarterly percentage decline in five years, and was last down 3.9 percent for the first quarter.

The euro hit its highs against the dollar earlier in the session after traders "covered" or reversed "short" bets against the euro once it crossed $1.1335, said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

The Australian dollar , which is closely correlated with commodity prices, soared to a roughly nine-month high of $0.7709 as oil prices - which are U.S. dollar-denominated - rose and became cheaper for holders of other currencies.

Against the yen, the dollar was last down 0.24 percent at 112.41 yen after touching an eight-day low of 112.02 yen earlier.

On Wall Street, the benchmark S&P 500 <.SPX> stock index was last up 0.59 percent <.SPX>.

(Reporting by Sam Forgione; Editing by Dan Grebler and Alistair Bell)

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