The dollar fell for the first time in three days against the euro as Asian stocks gained amid optimism the global recovery remains intact, damping demand for the greenback as a refuge. The U.S. currency weakened versus 15 of its 16 major counterparts after the Federal Reserve asked dealers for projections of central bank asset purchases over the next six months, easing concern its bond-buying program will fall short of expectations. New Zealand’s dollar rose after its central bank said high export prices and reconstruction in earthquake- hit areas were likely to offset weaker spending. “The rebound of economies worldwide looks to be on track, which could underpin risk-taking sentiment,” said Takashi Kudo, Tokyo-based general manager of market information service at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp. “This may lead to selling of ‘safe-haven’ currencies such as the dollar and the yen.” The dollar dropped to $1.3825 per euro at 6:55 a.m. in London from $1.3769 in New York yesterday, the biggest daily decline since Oct. 20. The U.S. currency fell to 81.60 yen from 81.75 yen. The euro rose to 112.81 yen from 112.58 yen. The Dollar Index, which tracks the greenback against currencies of six major U.S. trading partners, declined 0.4 percent to 77.864, also snapping a two-day gain. Growth Outlook Asian shares advanced, with the MSCI Asia Pacific Index gaining 0.3 percent, on optimism corporate earnings will improve as global growth quickens. South Korea’s central bank said today the current-account surplus almost doubled in September, widening to $4.06 billion from $2.19 billion in August. An index of executive and consumer sentiment in the 16 euro nations rose to 103.5 in October from 103.2 in September, according to a Bloomberg survey before today’s report. A New York Fed survey, obtained by Bloomberg News, asked investors and dealers about their expectations for the initial size of any new program of debt purchases and the time over which it would be completed. The survey also asked about the likely effect on yields, how often firms anticipate the Fed will re-evaluate the program and estimates of its ultimate size. “They probably want to make sure they don’t disappoint markets too heavily but also perhaps don’t want to overshoot too far,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “The Fed is still prepared to do quite a lot over the period ahead and that’s still negative for the dollar.” Fed Purchases The greenback has fluctuated between gains and losses this week as expectations for additional credit-easing measures from the Fed were offset by speculation the central bank will buy a smaller amount of bonds than some analysts predicted. Estimates for the size of the asset-purchase program range from $1 trillion at Bank of America-Merrill Lynch to $2 trillion at Goldman Sachs Group Inc., with economists at both firms agreeing the Fed will likely start by announcing $500 billion after its Nov. 2-3 meeting. New Zealand’s dollar gained against most major currencies after central bank Governor Alan Bollard said interest rates will probably need to rise in future. Bollard and his fellow policy makers left the benchmark rate unchanged at 3 percent today, as forecast by all 15 economists surveyed by Bloomberg. Higher export prices and reconstruction efforts in earthquake-hit Canterbury “seem to have offset the weak data lately,” said Imre Speizer, a market strategist in Wellington, at Westpac Banking Corp. “The Reserve Bank of New Zealand is looking forward and thinking there’s no need to further lower the path,” of monetary policy. New Zealand’s dollar gained 0.3 percent to 74.75 U.S. cents, and climbed 0.1 percent to 61.00 yen. Won Gains Korea’s won strengthened after the government raised its 2010 growth forecast and data showed the current-account surplus almost doubled. The currency recovered from earlier losses after Finance Minister Yoon Jeung Hyun said the economy will probably expand 6 percent in 2010, faster than an earlier projection of 5.8 percent. “The currency is gaining ground after Yoon’s comments,” said Yun Se Min, a currency trader at Busan Bank in Seoul. “Overseas investors are selling the U.S. dollar and exporters are also putting in orders to repatriate income.” The won climbed 0.4 percent to 1,123.70 per dollar, after falling as much as 1 percent earlier. The yen retreated from near a one-week high against the euro after the Bank of Japan said it will buy corporate debt with lower credit ratings than it accepted before, as part of its latest easing program to support the economy. The central bank left its benchmark interest rate between zero and 0.1 percent and kept the size of its credit and asset- buying programs unchanged today. To contact the reporters on this story: Candice Zachariahs in Sydney at Czachariahs2@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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