The dollar fell below 81 yen for the first time since April 1995 as initial jobless claims rose and the trade deficit widened, adding to speculation U.S. efforts to ease monetary policy will erode the value of the currency. Greenback losses deepened earlier after Singapore allowed appreciation in its currency to control inflation, pulling back from an effort to stem gains. Australia’s dollar rose to a record and Canada’s dollar reached parity for the first time since April as investors sought the currencies of nations with higher-returning assets. “Weaker data will only strengthen the case for the Fed to further ease monetary policy in the weeks ahead,” said Joe Manimbo, a market analyst in Washington at Travelex Global Business Payments, a currency-exchange network. “That is inherently dollar-negative.” The dollar dropped 0.5 percent to 81.41 yen at 10:22 a.m. in New York, from 81.81 yesterday. It touched 80.89 yen, the 15- year low. The greenback slid 0.8 percent to $1.4079 per euro, from $1.3961. The euro gained 0.5 percent to 114.72 yen, from 114.20 yesterday. There’s a 78 percent chance the yen will equal the record 79.75 per dollar by the end of this quarter, according to options trading monitored by Bloomberg. The currency pair reached that level on April 19, 1995. Singapore’s dollar appreciated as much as 1 percent to S$1.2894, the strongest level since 1981, when Bloomberg’s data begin. It later was up 0.5 percent to S$1.2967. The Monetary Authority of Singapore said it will steepen and widen the band in which its dollar trades against a weighted basket of currencies, seeking a “modest and gradual” advance. Malaysian Ringgit Other Asian currencies rallied. Malaysia’s ringgit gained 0.4 percent to 3.0828 against the dollar after touching a 13- year high of 3.0800. South Korea’s won climbed 0.9 percent to 1,111.10 versus the dollar after reaching 1.110.05, the strongest level since May 3. Singapore’s move “signals that all the Asian and emerging- market currencies will continue to strengthen, and, in turn, the U.S. dollar weaken,” Blake Jespersen, director of foreign exchange at Bank of Montreal in Toronto, said via e- mail. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies outside Japan, reached 115.84, the highest level since April 2008. Canada’s currency appreciated as much as 0.5 percent to 99.81 cents per greenback before trading little changed at C$1.0031. The nation’s trade deficit decreased in August more than economists forecast from a record in the previous month, Statistics Canada figures show. Aussie’s Rally Australia’s dollar rallied as much as 0.9 percent to 99.94 U.S. cents, the most since exchange controls were removed in 1983, before later trading at 99.28. Monthly consumer inflationary expectations for October rose to 3.8 percent from 3.1 percent, according to an e-mailed report from the Melbourne Institute for Economic and Social Research. Australia’s central bank aims to keep inflation in a range of 2 to 3 percent. The Dollar Index, used by IntercontinentalExchange Inc. to track the greenback against currencies including the euro, yen and Swiss franc, slid as much as 1.1 percent to 76.259, the lowest level since Dec. 14. Initial jobless claims increased to 462,000 in the week ended Oct. 9, from a revised 449,000, the Labor Department reported today. The median forecast of 47 economists in a Bloomberg News survey was for first-time jobless claims to be unchanged at 445,000. Wider Trade Deficit The U.S. trade deficit widened 8.8 percent to $46.3 billion in August, Commerce Department figures showed. The median forecast of 75 economists in a Bloomberg News survey was for a gap of $44 billion. Imports rose 2.1 percent, while exports increased 0.2 percent. Fed Chairman Ben S. Bernanke will speak tomorrow on monetary policy objectives and tools in Boston. He said on Oct. 4 that its first round of large-scale asset purchases aided the economy and that more easing is likely to help further. “The market is in a state of anxiety over what’s likely to come from the Fed,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “Everyone seems to be selling the dollar because of the Fed view.” China’s yuan advanced to its strongest level against the dollar since 1993 on speculation policy makers will yield to international pressure to let the currency appreciate faster. The Chinese central bank set the reference rate at 6.6582 per dollar, the highest level since a peg was dropped in July 2005. U.S. Senate Finance Committee Chairman Max Baucus said yesterday a bill punishing China over the value of the yuan may well pass in the U.S. Senate, with Congress submitting it to President Barack Obama for his signature. The yuan appreciated 0.2 percent to 6.6508 per dollar, according to the China Foreign Exchange Trade System. It touched 6.6503, the strongest level since the central bank unified the official and market exchange rates at the end of 1993. To contact the reporters on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; Keith Jenkins in London at kjenkins3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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