LONDON, Nov 18 (Reuters) - The dollar eased back on Wednesday from its biggest rise in three weeks the previous session, as traders awaited U.S. inflation data and minutes from the Bank of England's November meeting for further direction.
The dollar had rallied on Tuesday on the back of rare comments on the currency by U.S. Federal Reserve Chairman Ben Bernanke [ID:nLH705993], comments later echoed by other Fed officials and European Central Bank President Jean-Claude Trichet.
That pushed the euro well below $1.50, but most dealers say the dollar's gradual, longer-term decline is still intact.
Although the Fed may be in the very early stages of withdrawing its huge stimulus measures -- it said on Tuesday it will pare back its the discount window borrowing facility -- it is still nowhere near raising interest rates.
U.S. inflation data for October and BoE minutes of its November policy meeting, which will shed light on how unanimous or otherwise policymakers' vote to extend quantitative easing was, could give an otherwise quiet market direction.
"The Fed's relatively sanguine view on the dollar (although acknowledgement that it is an input into their monetary policy decision makings), coupled with the belief that asset prices are not forming another bubble, should provide a green light for recent trends to continue," said Lauren Rosborough, senior currency strategist at Westpac in London.