NEW YORK, US - The dollar wobbled Wednesday as rising investor appetite for riskier assets pushed up the euro and fueled another record high for gold prices.

The European currency jumped to 1.4961 dollars (S$2.0740) at 2200 GMT, compared to 1.4873 late on Tuesday in New York.

The dollar meanwhile edged up to 89.34 yen (S$1.3848) from 89.25 yen.

The euro was boosted by the recent rise in stock markets and increased prices for raw materials, particularly gold and oil, analysts said.

Gold hit a record peak of 1,152.85 dollars an ounce in trading on the London Bullion Market, the latest in a series of new pinnacles in recent weeks.

Data from the United States showing tame inflation and an unexpectedly weak level of housing starts suggested the Federal Reserve would stick to its near-zero interest rate policy, pressuring the dollar.

'With other countries either already raising rates or indicating there may be upward movement on rates in the near future, the dollar will continue to get pushed around as interest rate differentials diverge towards other currencies,' said Michael Wahl at PNC Bank.

Early Wednesday, data showed US consumer prices rose by a higher-than-expected 0.3 percent in October primarily due to higher gasoline prices.

But the consumer price index (CPI) showed a year-over-year decline of 0.2 percent.

'Despite the slight increase in top-line inflation, there is nothing to suggest that prices will increase sharply in the near term,' said Andres Carbacho-Burgos at Moody's Economy.com, who predicted the Federal Reserve would maintain easy money to support economic recovery.

'Deflation is so far still the most important downside risk.'

A separate report showed US housing starts tumbled 10.6 percent to an annualized pace of 529,000, far weaker than expected and a sign of renewed pressure on the sector.

Elsewhere on Wednesday, the British pound was in focus as dealers digested news that Bank of England policymakers were split three ways on their recent decision to pump more new money into the recession-hit economy.

The BoE agreed earlier this month to pump out another 25 billion pounds (S$58.23 billion) of fresh cash - a move backed by seven of the nine policymakers - including the bank's governor Mervyn King.

PNC's Wahl said the news left the market unsettled.

'Admittedly I was confused because the answer is either 'yes' or 'no' so how is there a three-way split?' he said.

'Well one member actually wanted a larger increase so the final tally was seven for 25 billion pounds, one for 40 billion and one for nothing. So what does this mean? At the moment, not much as sterling flattened out as investors could not determine if the minutes are dovish or hawkish.'

In late New York trade, the pound was at 1.6741 dollars from 1.6808 Tuesday.

The dollar stood at 1.0096 Swiss francs (S$1.379) after 1.0157.