The Dollar Index (DXY) declined for a fifth day as speculation the Federal Reserve and Chinese government will take further steps to encourage economic growth damped demand for safer assets. The U.S. currency fell versus all except one of its 16 major peers as European and Asian stocks rose. The Australian and New Zealand dollars led gains in higher-yielding currencies. The euro fell versus the yen as borrowing costs rose at a Spanish debt sale. China’s Premier Wen Jiabao may decide to cut banks’ reserve requirements when the cabinet meets to discuss ways to spur growth. Fed Chairman Ben S. Bernanke yesterday held out the possibility of further stimulus. “In Asian trading today there was talk about an imminent reserve requirement cut� in China, said Derek Halpenny, European head of global markets research at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. “The two days of testimony from Bernanke has held out the hope of further steps from the Fed. That hope is definitely still in the market.� The Dollar Index, which tracks the U.S. currency against those of six major trading partners, declined 0.3 percent to 82.787 at 6:37 a.m. New York time. The gauge earlier slipped to 82.734, the lowest level since July 5. The U.S. currency weakened 0.2 percent to $1.2305 per euro, and dropped 0.3 percent to 78.57 yen. The euro dropped 0.2 percent to 96.68 yen. To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net To contact the editors responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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