The dollar and Swiss franc fell against a majority of their peers as Asian stocks snapped a worldwide drop and investors pared bets Australia will cut interest rates, boosting demand for higher-yielding assets. The euro gained after the Financial Times reported that the euro area will discuss a new version of Finland’s collateral agreement with Greece, citing unidentified officials. The dollar traded 0.6 percent from a one-week high versus the euro amid speculation Federal Reserve Chairman Ben S. Bernanke may today disappoint investors betting that he will signal further easing. Australia’s dollar rose after the Reserve Bank Governor Glenn Stevens said “inflation bears careful watching.” “Stevens didn’t hit the panic button and he did instill some calm with his measured approach into Asian markets,” said Tim Waterer, a foreign-exchange dealer at CMC Markets in Sydney. “We’ve seen some stabilization in risk sentiment which is helping to support some of the risk currencies like the Aussie, kiwi and euro.” The dollar was at $1.4411 per euro as of 12:23 p.m. in Tokyo from $1.4379 in New York yesterday. It touched $1.4328 yesterday, the most since Aug. 19. The dollar fetched 77.30 yen from 77.46. The euro bought 111.40 yen from 111.38. The 17- nation euro rose 0.2 percent to 1.1428 versus the franc. Stocks, RBA The MSCI Asia Pacific Index of stocks was little changed and futures on the Standard & Poor’s 500 Index rose 0.5 percent. The S&P 500 yesterday dropped 1.6 percent and the Stoxx Europe 600 Index lost 1.2 percent. The Australian dollar rose for the first time in three days as futures traders pared bets on interest-rate cuts this year. The December interbank cash-rate contract shows wagers that the benchmark will be at 3.84 percent by December, up from 3.79 yesterday. Asia’s economic prospects are still favorable and Chinese growth remains “pretty solid,” the RBA’s Stevens told a parliamentary committee in Melbourne today. Australia’s mining boom, along with low unemployment and a strong banking system will assist the nation to navigate weaker international conditions, he said. “The foreign-exchange markets expected Stevens to tone down any hawkish stance but instead he held strong and enforced the wait-and-see approach,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage. “There is no reason to sell the Australian dollar post his testimony.” Australia’s dollar rose to $1.0478 from $1.0431 and is headed for a 0.7 percent gain since Aug. 19. Greek Collateral The euro rose after the FT reported a so-called “euro working group” is examining a non-cash collateral arrangement through which Greece would put up either property or equity in state-owned enterprises and financial institutions as a guarantee against euro-area bailout loans, citing unidentified officials. The 17-nation currency was also supported after CNBC reported that Standard & Poor’s, Moody’s Investors Service and Fitch Ratings all affirmed their ratings on German government debt. “There was news that credit rating agencies reaffirmed Germany’s credit rating and that helped the euro a little bit and the talk about collateral for Greek debt also perhaps helped,” said Mitul Kotecha, head of global currency strategy in Hong Kong at Credit Agricole CIB. “I don’t think there’s much upside momentum for the euro.” Waiting for Bernanke Declines in the dollar were limited before Bernanke speaks today at the Kansas City Fed’s annual economic conference in Jackson Hole, Wyoming. Bernanke last year foreshadowed the central bank’s second round of quantitative easing, or QE2, at the gathering. The Fed bought $600 billion of Treasuries from November through June. “The market has gone from very early in the week expecting quite a large QE3 to now still expecting some measures from Mr. Bernanke, but the expectation has moderated,” said Emma Lawson, a Sydney-based currency strategist at National Australia Bank Ltd. “You can probably still expect a dollar bounce if he does not provide any new measures.” 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. Today’s speech at Jackson Hole will come after data forecast to show the U.S. economy grew more slowly from April through June than initially estimated. Gross domestic product expanded at a 1.1 percent annual rate, according to a Bloomberg News survey of economists, compared with an earlier estimate of 1.3 percent. GDP grew at a 0.4 percent pace in the first quarter. The dollar has gained 1.6 percent in the past month against nine developed-nation peers, according to Bloomberg Correlation- Weighted Currency Indexes. The euro rose 0.8 percent and the yen gained 2.5 percent. To contact the reporters 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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