The Swiss franc, yen and dollar held onto declines versus their major peers after stocks extended a global rally amid signs of continued resilience among Asia’s biggest emerging economies. The euro rose toward a seven-week high versus the Swiss franc as a benchmark Asian stock index gained for a fourth day, reducing demand for safer assets. The Australian and New Zealand currencies climbed to the strongest levels in almost a month after data showed building permits increased in both countries. The dollar trimmed its advance this month after Federal Reserve Chairman Ben S. Bernanke said last week that the U.S. economy isn’t weak enough to warrant immediate additional stimulus. “Safe-haven currencies like the dollar, yen and franc are being sold because of higher stock prices on the back of improved risk sentiment,” said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities Ltd. “The market is looking carefully at economic data to get a clearer outlook for growth.” The franc declined to 1.1862 per euro as of 7:13 a.m. in London from 1.1838 yesterday, when it touched 1.1973, the weakest since July 11. The Swiss currency fell to 81.78 centimes per dollar from 81.58. The dollar traded at $1.4502 per euro from $1.4511 yesterday in New York, when it fell to $1.4549, the lowest level since July 5. The euro fetched 111.38 yen from 111.49 yen yesterday, when it appreciated 0.3 percent. Japan’s currency was at 76.78 per dollar from 76.83. Eyes on China The MSCI Asia Pacific Index added 1.1 percent. The MSCI World Index climbed 2.4 percent yesterday, while the Standard & Poor’s 500 Index of stocks advanced 2.8 percent. Gross domestic product in India increased 7.7 percent in the second quarter from a year earlier, the Central Statistical Office said today, more than the 7.6 percent gain predicted in a Bloomberg News survey of economists. China’s manufacturing activity quickened to 51 in August from 50.7 the previous month, the Purchasing Managers’ Index due Sept. 1 is predicted to say, according to a separate Bloomberg poll. “I will concentrate all my eyes on China: they’re buying my stocks, they’re buying my iron ore, they’re buying my copper,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage. “I think the Aussie and kiwi will do very well against the dollar.” Building Approvals The so-called kiwi gained against all 16 of its major counterparts after Statistics New Zealand said home-building permits rose 13 percent in July, the biggest jump since April 2008. Australia said the number of approvals granted to build or renovate houses and apartments climbed 1 percent from June, when it sank a revised 3.6 percent. The Australian dollar bought $1.0658 from $1.0656 yesterday, and earlier touched $1.0686, the most since Aug. 4. The currency climbed to as high as 82.20 yen, before trading at 81.83 yen from 81.88. New Zealand’s dollar gained 0.5 percent to 85.07 U.S. cents after advancing to 85.36, the most since Aug. 4. It bought 65.32 yen from 65.02 yen. The greenback has appreciated 1 percent in August against a basket of the developed world’s nine most-traded exchange rates, according to data compiled by Bloomberg. Fed Policy Bernanke sought in an address on Aug. 26 in Jackson Hole, Wyoming, 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. The Fed chairman has scheduled an extra day for the next policy meeting in September to “allow a fuller discussion” of the economy and the Fed’s possible response. The S&P/Case-Shiller index of home values in 20 U.S. cities fell 4.6 percent from June 2010, the biggest 12-month decrease since November 2009, according to the median forecast of economists surveyed by Bloomberg ahead of today’s data. Separate data today will show consumer confidence sank in August to the lowest level in 10 months, another survey projects. Demand for the euro was limited after European Central Bank President Jean-Claude Trichet said the bank is reviewing its assessment of inflation risks after a slowdown in growth. Trichet said yesterday in Brussels that “risks to the medium-term outlook for price developments are under study.” The comment to the European Parliament’s economic committee contrasts with the ECB president’s last policy statement on Aug. 4, when he said risks to the inflation outlook were “on the upside.” To contact the reporter on this story: Monami Yui in Tokyo at myui1@bloomberg.net To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net

Source