The dollar maintained a two-day gain against the Swiss franc after President Barack Obama endorsed deficit-cutting measures as a step toward raising the debt ceiling and avoiding default. Obama called the revival of the so-called Gang of Six proposal “good news.” The Australian dollar held onto yesterday’s advance before a report forecast to show sales of existing U.S. homes rebounded, supporting demand for higher- yielding assets. The euro kept a gain against the yen as European leaders prepare for a summit tomorrow on how to contain the region’s debt crisis. The Singapore dollar climbed to a record as Asian stocks rose. “We got a clue from Obama that there is some progress in the debt-limit negotiations, which is leading to some dollar buying versus other low-yielding currencies like the franc and yen,” said Daisaku Ueno, Tokyo-based president of Gaitame.com Research Institute Ltd., a unit of Japan’s largest online currency broker. “At the same time, that’s positive for high- yielding currencies on the back of improved risk sentiment.” The dollar bought 82.47 Swiss centimes as of 1:01 p.m. in Tokyo from 82.41 centimes yesterday in New York. The Japanese currency traded at 79.15 yen against the greenback from 79.18 yen. The Australian dollar was at $1.0719 from $1.0733, after it climbed 1.2 percent yesterday. The euro fetched 112.03 yen from 112.07 yen. The 17-nation currency was little changed at $1.4154. Singapore Record The Singapore dollar reached S$1.2139 per dollar, an all- time high, before trading at S$1.2146. The MSCI Asia Pacific Index of regional shares advanced 0.8 percent after the MSCI World Index rose 1.5 percent yesterday. The Thomson Reuters/Jefferies CRB Commodity Price Index climbed 0.8 percent. Obama said the revival of the plan from the Gang of Six, a bipartisan group of U.S. Senators, may help speed up negotiations on the deficit and raising the federal debt ceiling. He pledged this week to veto a Republican proposal to impose mandatory budget cuts. The government says it has until Aug. 2 before its ability to pay its debt expires. “The talk of the Gang of Six coming together and maybe helping facilitate some agreement on the debt ceiling, possible fiscal adjustments, that’s really been the catalyst for this move,” said Alan Ruskin, global head of Group of 10 currency strategy at Deutsche Bank AG in New York. “The dollar is coming back across the board.” Existing Home Sales Purchases of previously owned homes, which make up about 95 percent of the U.S. market, climbed 1.9 percent in June from May’s six-month low to a 4.9 million annual rate, according to the median projection of economists surveyed by Bloomberg News before a National Association of Realtors’ report today. Federal Reserve Bank of Kansas City President Thomas Hoenig said yesterday the U.S. economy will continue to grow “at a modest pace” of 2.5 percent to 3 percent in 2011 and 2012. Euro-area leaders are preparing for the second meeting in a month to hammer out a solution to the Greek debt crisis, which pushed the euro to $1.3837 last week, the lowest since March. While German Chancellor Angela Merkel said yesterday the crisis can’t be resolved in “one spectacular step,” Greek counterpart George Papandreou said in an interview that the summit could be a “make-or-break moment” for the euro region. Divided Over Solution European leaders are at odds with one another and with the European Central Bank over demands by Germany and Finland that private investors bear some of the burden of a new Greek bailout. “The Europeans are too divided over what to do, so our expectations are pretty low for this meeting,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “We like selling the euro on rallies.” Callow suggested investors sell the 17-nation currency on advances above $1.4250 over the next few days. Greece’s sovereign-debt crisis risks contaminating the rest of the euro region even if officials avert a default, the International Monetary Fund said yesterday. New Zealand’s dollar was 0.4 percent from a record high versus its U.S. counterpart after the Bank of Canada signaled an interest-rate increase, spurring speculation New Zealand’s central bank will follow suit as inflation quickens. The Bank of Canada kept its main interest rate unchanged at 1 percent and said borrowing costs will increase. Policy makers said core inflation will “remain around 2 percent” through 2013, faster than their April prediction that it would be remain below 2 percent until the second quarter of next year. Canada, New Zealand New Zealand’s consumer prices increased 5.3 percent in the second quarter from a year earlier, the most since 1990, a government report showed this week. The Reserve Bank will hold a policy meeting on July 28. “There is definitely some parallel between Canada and New Zealand at the moment,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “Both have extremely correlated monetary policies.” The so-called kiwi traded at 85.42 U.S. cents from 85.58 cents after reaching a record high of 85.73 cents yesterday. Malaysia’s ringgit advanced to the highest in more than a week before a government report today forecast to show inflation quickened to a two-year high. Inflation accelerated to 3.6 percent in June from a year earlier, the fastest pace since March 2009, a Bloomberg survey of economists showed ahead of today’s data. The currency appreciated 0.2 percent to 3.0015 per dollar, and reached 2.9950, the highest since July 11. To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Candice Zachariahs in Sydney at czachariahs2@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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