The Swiss franc, yen and dollar dropped against most major counterparts as stocks advanced on speculation the world will avoid a return to recession, reducing demand for a haven. The franc was the worst performer after Federal Reserve Chairman Ben S. Bernanke said last week in Jackson Hole, Wyoming, that the U.S. economy isn’t weak enough to warrant immediate additional stimulus. The euro pared its gain versus the yen as inflation slowed this month in several German states. “There’s a sense that risk is back on,” said Elizabeth Gregory, a market strategist at Swissquote Bank SA in Geneva. “We’ve seen equity markets doing pretty well since Bernanke’s speech on Friday. That’s helped people migrate away from their safe-haven positions in the Swiss franc.” The franc depreciated 1.2 percent to 1.1830 per euro at 7:04 a.m. in New York, from 1.1690 on Aug. 26. The franc slid 1.1 percent to 81.56 centimes versus the dollar, from 80.63 at the end of last week. The greenback traded at $1.4502 versus the euro, compared with $1.4499. The yen was little changed at 76.61 per dollar, compared with 76.64. The euro was at 111.16 yen, after earlier strengthening 0.4 percent to 111.59. The MSCI Asia Pacific Index rose for a third day, gaining 1.6 percent. The Stoxx Europe 600 Index climbed 0.9 percent, and futures on the Standard & Poor’s 500 Index advanced 0.9 percent. U.S. stock, bond and commodity markets will open as usual today after Manhattan was spared the worst of Hurricane Irene. U.K. financial markets are shut today for a holiday. Dollar ‘Sold’ “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 at Westpac Banking Corp. in Singapore. “Equity markets around the region are doing pretty well today.” Bernanke sought in his address on Aug. 26 in Jackson Hole to reassure investors and the public that U.S. growth is safe in the long run. While he said the Fed still has tools to aid the recovery if needed, he stopped short of indicating that the central bank will move ahead with a third round of government bond-buying. Personal spending, which accounts for about 70 percent of the U.S. economy, increased 0.5 percent in July after a drop of 0.2 percent in the prior month, according to the median forecast of 64 economists in a Bloomberg News survey. Franc Versus Euro The franc also weakened versus the euro on speculation Swiss policy makers will introduce new measures to cap the currency’s 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 News. 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. The euro pared gains after inflation in several German states slowed in August as seasonal food and energy prices fell. The inflation rate decreased to 2.2 percent from 2.3 percent in Bavaria and to 2.3 percent from 2.7 percent in North Rhine-Westphalia. The rates in Hesse, Saxony and Brandenburg also eased. Noda Chosen The yen fell against higher-yielding currencies 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. 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. Australia’s 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 rose 2 percent in July from the prior month, according to a Bloomberg survey before tomorrow’s bureau of statistics’ report. The Aussie strengthened 0.4 percent to $1.0616 after increasing to $1.0634, the highest level since Aug. 4. It gained 0.4 percent to 81.38 yen. 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: Dave Liedtka at dliedtka@bloomberg.net

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