The Dollar Index was 0.3 percent from a two-week high as Asian stocks slumped amid concern the global economy is slowing, boosting demand for haven currencies. Australia’s dollar slid for a fifth day after data showed the South Pacific nation’s retail sales unexpectedly declined. The yen slid against the greenback and euro on speculation the Bank of Japan will add to monetary easing to help halt the yen’s advance. The Swiss franc dropped against most peers as a technical indicator signaled its recent gains were too rapid. “Before, people sold the dollar because of concern about an economic slowdown in the U.S., but now that concern isn’t limited to the U.S.,” said Tsunemasa Tsukada, chief manager for currencies and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s largest financial group. Demand for refuge currencies is on the upswing as traders “see a higher chance of a correction in risk assets,” he said. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, was at 74.481 as of 1:29 p.m. in Tokyo from 74.533 in New York yesterday, when it reached 74.734, the most since July 21. The dollar was little changed at $1.4207 per euro and rose 0.2 percent to 77.27 yen. The yen fell to 109.78 per euro from 109.58. The Swiss franc slumped 0.5 percent to 76.64 centimes per dollar. The Australian dollar, known as the Aussie, sank to $1.0751 from $1.0779. The MSCI Asia Pacific Index of regional shares tumbled 2.1 percent. Ten-year Treasury yields sank to 2.58 percent today, the lowest since November. ‘Stall Speed’ The U.S. economy is “very close to stall speed” and the Federal Reserve many need to consider signaling a longer commitment to low interest rates, according to Peter Fisher, head of fixed income at BlackRock Inc. which is based in New York and oversees $3.66 trillion. U.S. service industries probably expanded in July at about the same pace as the prior month, a sign the biggest part of the economy had little momentum entering the second half of 2011, analysts said before the Institute for Supply Management reports the figure today. Australian retail sales dropped 0.1 percent in June from a month earlier when they fell 0.6 percent, the Bureau of Statistics said in Sydney today. A separate report showed the nation’s trade surplus narrowed. German figures due tomorrow may say factory orders in Europe’s largest economy slid 0.5 percent in June from May, the first decrease in three months, according to economists surveyed by Bloomberg News. Five of 14 economists surveyed by Bloomberg News said the BOJ will increase monetary stimulus at its Aug. 4-5 meeting, while two said that may happen and seven expect no change. The Swiss currency retreated after touching a record 76.10 centimes per dollar earlier today. The relative strength index for the dollar-franc rate reached 16.7 yesterday, past the 30 level some traders see as a sign an asset’s price is poised to reverse course. To contact the reporters on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

Source