The dollar weakened against most of its major counterparts as traders awaited a speech by Federal Reserve Chairman Ben S. Bernanke and a report forecast to show the world’s biggest economy is slowing. The U.S. currency headed for a second weekly loss versus the euro and fell the most today against the New Zealand dollar and Norwegian krone. Bernanke will speak today at the Kansas City Fed’s annual economic conference in Jackson Hole, Wyoming, and may announce further monetary stimulus measures. The yen rose against 13 of its 16 major peers after Japan’s Prime Minister Naoto Kan said he’s resigning 14 months into the job. “There probably won’t be immediate further stimulus but we think Bernanke will acknowledge that the Fed is absolutely ready to act if the data shows any further deterioration in the economy,” said Neil Mellor, a currency strategist at Bank of New York Mellon Corp. in London. “If he conveys that there is absolutely no way the Fed will allow the U.S. economy to deteriorate, and that they will use all policy tools at their disposal, then it will be risk-on and the dollar will weaken.” The dollar declined to $1.4439 per euro as of 9:47 a.m. in London from $1.4379 in New York yesterday, for a loss of 0.3 percent this week. The greenback fell to 77 yen from 77.46 yen, and slipped to 79.15 Swiss centimes from 79.30 centimes. The yen advanced to 111.16 per euro from 111.38. The U.S. currency has traded within a two-cent range against the euro this week, between $1.4328 and $1.45 as investors mulled whether Bernanke will announce further measures to boost the economy. Global Recession The global economy has a 50 percent chance of slipping into recession as the economies of Europe and the U.S. struggle to grow, Nobel laureate and New York University professor Michael Spence said yesterday in a Bloomberg Television interview in Hong Kong. U.S. gross domestic product grew 1.1 percent in the three- months through June, down from an earlier estimate of 1.3 percent, according to the median estimate in a Bloomberg survey before today’s report. GDP expanded at a 0.4 percent pace in the first quarter. “Data releases in the U.S. and elsewhere will be overshadowed by Bernanke’s speech,” Steve Barrow, the London- based head of Group-of-10 currency research at Standard Bank Plc, wrote in a note to clients today. The dollar has weakened 1.8 percent in the past three months against nine developed-nation peers, according to Bloomberg Correlation-Weighted Currency Indexes. The euro has appreciated 0.4 percent and the yen has gained 4.2 percent. ‘All it Can’ At last year’s Jackson Hole conference, Bernanke 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. “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 that 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. Yen Gains The yen advanced for the first time in three days versus the dollar as Kan said he was stepping down after parliament passed the final two pieces of his legislative agenda. “I feel I’ve done everything I could under these difficult conditions,” Kan told Democratic Party of Japan lawmakers at a nationally televised meeting today in Tokyo. Japan’s government will outline measures to help the nation cope with a stronger currency on Aug. 29, the Nikkei newspaper reported, without citing where it obtained the information. The euro snapped a two-day decline against the dollar after the Financial Times reported officials from the 17-nation euro- area will discuss a new version of Finland’s collateral agreement with Greece. The 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 European officials. The single currency was also supported after Standard & Poor’s, Moody’s Investors Service and Fitch Ratings all said they continue to rate German government debt at AAA with a stable outlook. “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. To contact the reporter on this story: Garth Theunissen in London gtheunissen@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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