Dollar rally derailed as gradual Fed pace prompts Dec blues

New York

THE dollar's in a funk. The US currency is headed for its biggest monthly loss since June after the Federal Reserve raised its target from near zero on Dec 16 and underscored that it will proceed gradually with additional interest-rate increases.

The message from the Fed, combined with European Central Bank stimulus measures that were less robust than some investors anticipated, have led dollar bulls to retreat. Large speculators such as hedge funds trimmed futures bets on greenback gains the past three weeks, Commodity Futures Trading Commission data show.