The dollar index dropped to the lowest level in eight months on speculation that the Federal Reserve will sooner or later have to report to fresh monetary easing to prop up the US economy.
The Dollar Index fell to 78.616, the lowest level since January, before trading at 78.872 from 79.014 in New York yesterday. The index tracks the US currency against the currencies of six major trading partners.
The yen traded near its strongest versus the dollar since Japan intervened on Sept. 15, as the Tankan survey today showed that business confidence among large manufacturers improved at a slower pace.
The US currency was at US$1.3594 per euro from US$1.3585, after depreciating to US$1.3639, the weakest since April 15.
The yen was at 83.64 per dollar from 83.87, after reaching 83.50, the strongest since Sept. 15.
The euro was at 113.69 yen from 113.94.
The Tankan index of sentiment at the nation’s largest manufacturers climbed by 7 points in September, the smallest increase since early 2009, the Bank of Japan said in Tokyo.
Confidence is expected to fall to minus 1 in December, the report said.
A negative reading mean that pessimists outnumber optimists.
The South Korean won rose to a four-month high after the Bank of Korea said that the current-account surplus this year may exceed its forecast.
The won rose 0.4% to 1,142.10 per dollar as of the 3 p.m. close in Seoul. It touched 1,139.84, the strongest level since May 14.
A Bank of Korea official was quoted as saying that the current account surplus could be more than the full-year prediction of US$21bn by September.
The won is up 5% this month, Asia’s best performance, as global funds pumped more than US$3.1bn into Korean shares.
The dollar is down 10% versus the euro this quarter, the worst performance among the European currency’s 16 major counterparts. The greenback has pared this year’s advance to 5.4%.
Meanwhile, the Swedish krona rose versus the euro and dollar after a report showed higher-than-expected consumer confidence in the Nordic country.
Sweden’s krona gained 0.3% to 9.1574 per euro and was 0.4% stronger against the dollar at 6.7356. It touched 9.0921 per euro on Sept. 22, the strongest since Oct. 15, 2007.
The country’s consumer confidence index climbed to 28.4 in September, the most since August 2000, the National Institute of Economic Research in Stockholm said today. That beat the 24 average estimate of economists.
