The euro dropped toward a 10-year low against the yen and fell versus the dollar as traders awaited a press conference by European Central Bank President Jean-Claude Trichet after policy makers kept interest rates on hold. The pound slumped against all its major counterparts after the Bank of England unexpectedly expanded its bond-purchase plan and kept its benchmark interest rate at a record low. The Dollar Index gained after the U.K. central bank’s decision. The Swiss franc weakened after the central bank said its currency holdings increased to a record last month after its decision to cap the currency’s gain. “The ECB’s decision to leave rates on hold shouldn’t surprise the market,” said Jeremy Stretch, executive director of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “Attention now turns to Trichet’s press conference for any announcement of more non-standard measures to try to alleviate the depth of the sovereign-debt crisis.” The euro fell 0.7 percent to 101.80 yen at 1:26 p.m. in London after dropping to 100.76 on Oct. 4, the weakest level since June 2001. The currency slid 0.6 percent to $1.3263. It dropped to $1.3146 on Oct. 4, the lowest since Jan. 13. The yen was little changed at 76.76 per dollar. Sterling slumped 1 percent to $1.5304, and weakened 0.4 percent to 86.66 pence per euro. ECB officials left the benchmark rate at 1.5 percent, as predicted by 41 of 52 economists in a Bloomberg News survey. Five forecast a cut to 1.25 percent and six expected a reduction to 1 percent. Trichet will hold a press conference at 2.30 p.m. in Berlin. The meeting is the last he will chair before handing the presidency to Italy’s Mario Draghi on Nov. 1. Pound Drops Sterling tumbled after U.K. policy makers said they would increase their bond-purchase program by 75 billion pounds. The median forecast of economists surveyed by Bloomberg News was for no change. “It’s slightly bigger than we thought,” said John Hydeskov, chief analyst at Danske Bank A/S in London. “It’s definitely not good for the pound. We’re seeing a big weakening at the moment. I would say that this can continue to 87.50 pence.” The main rate was maintained at 0.5 percent, as predicted by all 53 economists in a separate survey. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, gained 0.6 percent to 79.436. Franc Falls The franc dropped for a second day against the dollar on speculation the central bank will impose further measures to contain its strength after imposing the cap last month at 1.20 per euro. Reserves jumped to 282.4 billion francs ($306 billion) at the end of September, from 253.4 billion francs the previous month, the SNB said. “The Swiss National Bank supports the euro-franc exchange rate with franc sales, and there is continued speculation that the SNB might raise the lower threshold for the euro-franc from 1.20,” Lutz Karpowitz, a senior currency strategist at Commerzbank in Frankfurt, wrote in a note to clients. The franc dropped 0.8 percent to 93.07 centimes per dollar, and fell 0.8 percent to 82.54 yen. It was little changed at 1.2322 per euro. To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Keith Jenkins in London at kjenkins3@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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