The dollar has fallen against European currencies and the yen for a second day after US Federal Reserve chairman Ben Bernanke played down inflation fears and hint ed at ending the two year run of interest rate increases.

This morning the dollar stood at 1.2601 to the euro, 1.8454 to the pound and 0.008564 to the yen.

The minutes from the meeting are expected to show the Federal Reserve is concerned about an economic slowdown caused by higher rates. Kathy Lien, chief strategist at the currency trader FXCM told the Telegraph: "Traders are taking Bernanke's comments as very dollar-bearish and have interpreted them to mean that he will probably not raise interest rates in August.

"If this is truly the end of Fed rate rises, this could also be the beginning of a long-term dollar downtrend."