The euro traded near a seven-week high against the dollar as optimism the global recession is easing spurred demand for higher-yielding assets. Europe’s single currency gained for a third day versus the British pound before a Chinese report tomorrow that may show exports fell the least in four months, adding to signs the world economy is reviving from its worst slump in half a century. South Korea’s won climbed to its strongest in almost seven months versus the dollar as stock gains spurred demand for emerging-market assets. “Investors are viewing the ‘green shoots’ in the global economy and gains in equities as further evidence the world is on the road to recovery,” said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “This is reducing safe-haven demand for the dollar.” The euro traded at $1.3634 against the dollar as of 6:19 am. in London, from $1.3634 in New York last week. It earlier reached $1.3668, the strongest level since March 24. The U.S. currency was at 98.48 yen from 98.47 yen. The euro was little changed at 134.26 yen from 134.23 yen. The euro fell to 89.59 pence from 89.51 pence. The won rose 0.9 percent to 1,235.90 per dollar, after touching 1,225.97, the strongest level since Oct. 15, according to data compiled by Bloomberg. The VIX, a gauge of investor risk-aversion, declined 4.2 percent to 32.05 on May 8 and touched 31.19, the lowest since Sept. 22. The MSCI World Index rose 0.5 percent today, extending nine straight weeks of gains. The MSCI Asia Pacific index of regional shares advanced 0.8 percent. Asian Currencies Asian currencies also advanced on optimism the worst of the global economic crisis is over. The won climbed for a third day against the dollar, taking gains in the past month to 8 percent, Asia’s best performance after the Indonesian rupiah. Overseas investors bought more Korean shares than they sold for a seventh day, the longest run of net purchases since March, according to stock exchange data. “The apparent stabilization in the major economies has guided the dollar lower as investors seek out higher risk, higher return investments,” Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia, wrote in a research note today. New Zealand Dollar The New Zealand dollar gained for a seventh day against the dollar and the yen after a government report showed consumer spending on debit, credit and store cards rose for a third month. The value of transactions on electronic cards at New Zealand retailers increased 0.3 percent in April from March, when they rose a revised 0.4 percent, Statistics New Zealand said. Excluding spending at fuel outlets and workshops, transactions gained 0.5 percent. New Zealand’s currency gained 0.9 percent to 59.99 yen after touching 60.12 yen, the strongest since April 6. It rose 0.9 percent to 60.94 U.S. cents. The yen rose against 10 of the 16 most-traded currencies on speculation Japanese companies decided to buy after it dropped to the lowest in a month versus the euro. “There’s some buying of the yen from Japanese exporters,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “They are capping the topside” of the euro and the dollar against the yen, he said. Breakeven Point Japanese exporters said they can remain profitable as long as the yen trades at 97.33 per dollar or weaker, a Cabinet Office survey showed April 22. The level is stronger than the 104.74 breakeven point companies provided last year, according to the survey. Fuji Heavy Industries Ltd., the maker of Subaru-brand vehicles, said on May 8 it forecasts exchange rates of 95 yen to the dollar and 125 yen to the euro for this fiscal year ending next April, compared with 102 yen and 147 yen a year earlier. The stronger yen would widen the company’s operating loss by 27.1 billion yen, it said. The U.S. currency also weakened as futures traders reversed bets the euro will decline against the dollar, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop -- so-called net longs -- was 3,368 on May 5, compared with net shorts of 2,073 a week earlier. “The improvement in risk appetite has hit dollar sentiment hard as reflected in the latest Commitment of Traders report,” Mitul Kotecha, head of global foreign-exchange strategy at Calyon in Hong Kong, wrote in a research note today. “This has been reflected in a breakout of previous ranges above 1.35 in euro-dollar, 1.50 in the pound and 0.75 in the Australian dollar amongst other currencies.” Futures are agreements to buy or sell assets at a set price and date. The figures reflect holdings in currency-futures contracts at the Chicago Mercantile Exchange as of Tuesday.

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