* Dollar hits 15-mth low vs currency basket
* FOMC minutes: Dollar decline has been orderly
* Dollar/yen hits 10-mth low, nears 13-year trough
(Adds comment, updates prices)

By Naomi Tajitsu

LONDON, Nov 25 (Reuters) - The dollar hit a 15-month low against a currency basket on Wednesday after Federal Reserve minutes showed policymakers saw the U.S. currency's recent decline as orderly.

Traders dumped the dollar across the board, pushing it to a 10-month low against the yen, as the minutes also reinforced the view U.S. interest rates will stay essentially at zero until around mid-2010.

The U.S. currency's latest bout of weakness came as European shares .FTEU3 rose 0.7 percent and gold XAU= hit a record high of $1,179.80, underlining the trend for investors to diversify away from the dollar and into other assets.

Demand among central banks to diversify was highlighted by a report that India may consider buying more gold from the International Monetary Fund, while Russia's central bank said it would invest some of its currency reserves in Canadian dollars.

Minutes from the U.S. central bank's November meeting showed board members considered the dollar's fall against major currencies since March orderly, further persuading investors the U.S. currency will stay weak. [ID:nN24313828]

Some analysts focused on the fact Fed policymakers flagged the possibility a weak dollar may raise inflation expectations, only to add that this was unlikely to happen.

At the moment they have characterised the risks (of dollar weakness feeding into higher inflation) as being low and so it is being seen by the market as a further endorsement of further gradual dollar weakness, said Daragh Maher, senior currency strategist at Calyon in London.

The dollar has been sold for much of 2009, falling 8 percent on a trade-weighted basis and 30 percent versus the high-yielding Australian dollar since January on the view U.S. rates will stay low as other countries start to raise theirs.

By 1250 GMT, the dollar index .DXY, which measures its performance against a basket of six currencies, had fallen 0.8 percent to 74.497.

The euro hit a 15-month high of $1.5096 according to Reuters data and was last up 0.8 percent at $1.5076. The Swiss franc briefly hit parity against the U.S. dollar.

Traders said dollar losses accelerated after the comments from the Russian central bank while the Canadian dollar hit the day's high versus its U.S. counterpart. [ID:nGEE5AO10Z]

The dollar fell 1 percent to 87.64 yen, according to Reuters data, after falling as low as 87.57. It approached a 13-year low of 87.10 hit in January.

A strong yen is seen hindering growth in Japan, which relies heavily on exports. Data on Wednesday showing exports rose on the month in October while posting a smaller-than-expected fall on the year suggested Japanese firms may be weathering yen strength at the moment. [ID:nT323072]


The Australian dollar rallied 1 percent to $0.9304 after bullish comments from Australia's central bank raised speculation of an interest rate hike next month. [ID:nSYD514867]

Movements in the options market were consistent with the Fed's view that the dollar's decline has been orderly.

One-month euro/dollar implied volatility EUR1MO= traded in the low 10 percent region on Wednesday, edging towards the year's low in the mid-9 percent area hit in September.

Risk reversals, which indicate how volatile a rise or fall is likely to be, showed a move lower in the dollar is not expected to be erratic.

Euro/dollar risk reversals EUR1MRR= were at around 0.9 percent in favour of euro puts -- the right to sell the single currency at an agreed price at a specified time -- indicating a rise in the euro against the dollar would be perceived as more orderly than a fall.

Dollar/yen risk reversals favour dollar puts, but not as much as they have in past months.

For a link to a graphic on the euro/dollar and risk reversals, click on:


(Editing by Nigel Stephenson) ((naomi.tajitsu@reuters.com; +44 207 542 5830; Reuters Messaging: naomi.tajitsu.reuters.com@reuters.net))