The dollar gained against a majority of its most-traded peers amid speculation on what steps Federal Reserve Chairman Ben S. Bernanke will outline tomorrow to stimulate the U.S. economy. The greenback advanced as investors bet on whether Bernanke will signal willingness for a third round of so-called quantitative easing, or QE3, at a speech at Jackson Hole, Wyoming. The euro fell before a private report forecast to show German consumer confidence is the lowest in almost a year. The yen gained even after yesterday’s announcement that Japan’s government will start a $100 billion fund designed to cope with strength in the currency. “I’d have a bias toward more U.S. dollar buying as I just don’t see Bernanke as coming out and delivering anything too dramatic on the QE3 front,” said Mike Burrowes, a currency strategist at Bank of New Zealand Ltd. in Wellington. “There’s a bit of a battle going on between risk sentiment and a reassessment of QE3.” The dollar traded at $1.4410 per euro as of 12:58 p.m. in Tokyo from $1.4414 in New York yesterday, when it gained 0.2 percent. It fetched 76.97 yen from 76.98 after rising 0.4 percent yesterday. The euro slipped to 110.92 yen from 110.96. The greenback has moved within a two-cent range against the euro this week, between $1.4347 and $1.45, before Bernanke speaks at the Kansas City Fed’s annual economic conference. The address will come amid speculation that a slowing U.S. economy and Europe’s debt crisis will hobble global growth. Fed’s Options Bernanke told Congress in July the Fed’s options to bolster the economy include increasing the average maturity of its bond portfolio and cutting the interest rate on excess reserves, as well as buying more debt and keeping rates low. At last year’s Jackson Hole conference, he said the Fed would “do all that it can” to ensure a continuation of the economic recovery and that buying more debt might be warranted if growth slowed. Two months later, the Fed announced a $600 billion second round of asset purchases that ended in June. U.S. jobless claims declined by 3,000 to 405,000 in the week ended Aug. 20 from the previous week, Labor Department figures will show today, according to a Bloomberg News survey of economists. Bookings in the U.S. for goods meant to last at least three years rose 4 percent in July, a Commerce Department report showed yesterday. That compared with economists’ prediction for a 2 percent increase. QE3 ‘Unlikely’ “The market hoping for QE3 to be announced will be disappointed,” said Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington. “We might see a little bit of rise in the U.S. dollar in the near term on the back of any pull-back in equities.” The euro snapped a four-day advance versus the yen before Nuremberg, Germany-based market research company GfK SE releases its consumer sentiment index today. The gauge will decline to 5.1 next month, the least since October 2010, from 5.4 in August, according to a Bloomberg survey of economists. That would follow data this week that showed business confidence in Europe’s biggest economy was at the lowest in more than a year and investor sentiment slid the most in five years. “If it’s weak, it will probably highlight to markets that the European debt crisis is starting to impact confidence in the core economies,” Bank of New Zealand’s Burrowes said about today’s confidence data. Germany is “really seen as supporting euro-zone growth in general,” he said. Yen Measures European Union lawmakers will hear from finance chiefs on Aug. 29 in Brussels about steps to manage the debt crisis. The European Parliament’s economic committee received confirmation that European Central Bank President Jean-Claude Trichet will attend, said Marjory van den Broeke, a spokeswoman for the assembly. The yen failed to weaken even after Japanese Finance Minister Yoshihiko Noda announced yesterday a $100 billion funding program intended to encourage the exchange of “yen- denominated funds to foreign currencies.” The plan isn’t likely to have a strong impact on the yen as it doesn’t outline coordinated action with the Bank of Japan in monetary easing or further intervention, Masafumi Yamamoto, chief currency strategist at Barclays Bank Plc in Tokyo, wrote in a research note today. The Japanese currency has climbed 6.5 percent over the past three months versus its U.S. counterpart and touched a post- World War II record of 75.95 per dollar on Aug. 19. A stronger yen makes Japanese-made products costlier overseas and reduces the value of overseas sales by the nation’s exporters when repatriated. The won fell for a second day after the Bank of Korea said its sentiment index fell to 99 in August from 102 in July. A reading below 100 indicates people are more pessimistic than the average between the first quarter of 1999 and the second quarter of 2008. The currency declined 0.3 percent to 1,084.90 per dollar, after slipping 0.4 percent yesterday. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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