The Swiss franc, yen and dollar weakened against most major counterparts as stocks rose amid optimism the world economy will avoid a recession, reducing demand for so-called haven currencies. The yen declined toward a three-week low against the euro as Japanese Finance Minister Yoshihiko Noda, who has overseen three currency-market interventions in the past year, was chosen to succeed Prime Minister Naoto Kan. Australia’s dollar climbed to a three-week high before a report tomorrow that economists said will show building approvals increased in July. “We’re seeing the U.S. dollar get sold, but also the other safe-haven currencies such as the yen and Swiss franc,” said Jonathan Cavenagh, a currency strategist in Singapore at Westpac Banking Corp. “Equity markets around the region are doing pretty well today.” The franc slid 1 percent to 1.1810 per euro as of 9:02 a.m. in London, and weakened 0.8 percent to 81.31 centimes per dollar. The yen fell 0.2 percent to 111.36 per euro, after dropping to 111.65 on Aug. 25, the lowest level since Aug. 8. It traded at 76.66 per dollar from 76.64. The greenback slipped 0.2 percent to $1.4525 per euro. The MSCI Asia Pacific Index of shares rose for a third day, gaining 1.5 percent. The Stoxx Europe 600 Index climbed 0.7 percent, and Standard & Poor’s 500 Index futures advanced 1.1 percent. Financial markets in London are closed today for a holiday. Bernanke Comments Fed Chairman Ben S. Bernanke said during an Aug. 26 speech in Jackson Hole, Wyoming, that the central bank still has tools to boost growth, without specifying what they were or whether they would be deployed. A second day has been added to the next Federal Open Market Committee meeting in September to “allow a fuller discussion” of the economy and the Fed’s possible response, Bernanke said. The franc weakened against all of its major counterparts tracked by Bloomberg amid speculation Swiss policy makers will introduce new measures to cap its gains and local banks may start charging customers for franc deposits. UBS AG said on Aug. 26 it may levy a temporary excess balance fee to stem the inflow of Swiss francs into its customers’ cash clearing accounts. The Swiss lender cited “the prevailing market conditions which in particular affect the Swiss Franc.” It made the comment in a note to bank clients sent via the Swift system and confirmed to Bloomberg. Money Supply Swatch Group AG Chief Executive Officer Nick Hayek said the Swiss central bank should boost money supply further to weaken the franc, Der Sonntag reported yesterday, citing an interview. Swiss export and tourism industries will be able to work with the franc at 1.25 to 1.30 to the euro, Hayek told the newspaper. Noda was elected head of the ruling Democratic Party of Japan, paving the way for the 54-year-old finance minister to become the third premier since the party took power two years ago. The DPJ is set to use its majority in the lower house to appoint him as premier to succeed Kan as soon as tomorrow. “Noda’s victory will ensure a smooth continuation of Japan’s measures against the yen’s appreciation,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate and Investment Bank in Tokyo. Aussie Gains The Australian dollar rose for a third day against the yen as speculation eased that the South Pacific nation’s central bank will cut interest rates. Approvals to build homes in Australia increased 2 percent in July from the previous month, according to the median forecast of economists in a Bloomberg News survey before tomorrow’s report from the bureau of statistics. Futures shows investors are betting the Reserve Bank of Australia will cut its key rate to 3.92 percent by December, compared with wagers on a 3.86 percent level last week. “Expectations of rate cuts in Australia have been wound down,” said Janu Chan, a Sydney-based economist at St. George Bank Ltd. The so-called Aussie strengthened 0.4 percent to $1.0611 after increasing to $1.0634, the highest level since Aug. 4. It gained 0.4 percent to 81.34 yen. The U.S. dollar has weakened 13 percent in the past 12 months, the worst performer tracked by Bloomberg Correlation- Weighted Currency Indexes, amid signs the world’s largest economy is losing momentum. “There’s more of a structural U.S. dollar weakness story that will probably come into play,” said Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington. The Fed “will certainly discuss additional policy stimulus. The markets will continue to look for that, which means further weakness in the U.S. dollar.” U.S. stock, bond and commodity markets will open as usual today after Manhattan was spared the worst of Hurricane Irene. To contact the reporters on this story: Keith Jenkins in London at kjenkins3@bloomberg.net; Kristine Aquino in Singapore at kaquino1@bloomberg.net To contact the editor responsible for this story: Keith Campbell at k.campbell@bloomberg.net

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