The dollar reached a 15-year low against the yen and fell a second day versus the euro after a Group of 20 pledge to avoid “competitive devaluation” damped speculation governments will buy the greenback to weaken their currencies. The dollar slid against 15 of its 16 major counterparts on the prospect that the Federal Reserve will announce another round of bond purchases next week to keep borrowing costs near zero. Australia’s dollar advanced to within one U.S. cent of parity after a report showed producer prices rose faster than economists estimated. Asian currencies gained versus the dollar on speculation nations in the region will refrain from intervening in foreign-exchange markets to protect exporters. “The G-20 has shown no indication that the U.S. will back away from the large quantitative easing policy anticipated from the Fed,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. The euro is acting as the “anti-dollar” again because the trading bloc has “the only major central bank which isn’t talking about quantitative easing at the moment.” The U.S. currency sank to as low as 80.66 yen, the weakest level since April 1995, before trading at 80.75 yen as of 6:53 a.m. in London. The dollar declined to $1.4053 per euro from $1.3954 last week in New York. The euro traded at 113.49 yen from 113.53 yen, and was little changed at 1.3638 Swiss francs. G-20 officials, ending a meeting in South Korea on Oct. 23, agreed to refrain from “competitive devaluation” and allow markets to set foreign-exchange values, seeking to calm fears over a potential trade war. Policy makers called for more sustainable current-account deficits without embracing a U.S. proposal for targets. G-20 members will meet again in Seoul on Nov. 11 and 12. ‘Weak Compromise’ “The final communiqué shows all the signs of a weak compromise between competing interests,” said Gareth Berry, a currency strategist in Singapore at UBS AG. “The pledge to avoid competitive devaluation probably reduces the risk of a trade war. As such, it should be broadly supportive for risk appetite and would likely be supportive of the Australian and Canadian dollars and the Nordic and emerging-market currencies, all at the expense of the dollar.” The Fed may buy $2 trillion of assets to stimulate the U.S. economy, starting with a program of about $500 billion of buying over six months that is likely to be announced at the November meeting, Goldman Sachs Group Inc. wrote in a note to clients. Quantitative easing would put the dollar under devaluation pressure, Canadian Finance Minister Jim Flaherty said in Seoul today. The G-20’s pledge isn’t good enough yet to resolve the problem of global economic imbalances, he said. Australian Dollar Australia’s dollar rallied for a second day as the producer prices spurred traders to increase bets the central bank will boost interest rates next month. “Prospects for the resumption of interest-rate increases are strengthening,” said Daisaku Ueno, president in Tokyo at Gaitame.com Research Institute Ltd., a unit of Japan’s largest currency margin company. “This is giving a strong impetus to buy the Aussie.” The Australian currency rose 1.2 percent to 99.44 U.S. cents, after climbing to $1.0004 on Oct. 15, the highest level since it was freely floated in 1983. The Aussie gained 0.5 percent to 80.34 yen. Australian producer prices index advanced 1.3 percent in the third quarter from the prior three months, when it gained 0.3 percent, the Bureau of Statistics said in Sydney. The odds the central bank will raise borrowing costs next month rose to 53 percent from 38 percent last week. Won Gains South Korea’s won strengthened for a second day on speculation Asian nations will uphold the G-20 pledge to avoid weakening currencies to lift exports. “The G-20 meeting will help the won strengthen since it will be more difficult for authorities to intervene to control gains,” said Ha Joon Woo, a currency trader at Daegu Bank in Seoul. “But I don’t think the currency war is really over.” The won appreciated 0.6 percent to 1,116.10 per dollar, the Taiwan dollar gained 0.5 percent to 30.653, and Singapore’s dollar rose 0.4 percent to S$1.2921. The MSCI Asia Pacific Index of regional shares advanced 1.2 percent. Asian currencies will likely appreciate against their U.S. counterpart, according to Faros Trading LLC, which executes currency transactions on behalf of hedge funds and institutional clients. “Japan is unlikely to do any intervention of a physical nature until after the G-20 meetings in November and so short U.S. dollar positions are in a sweet spot,” said Douglas Borthwick, Stamford, Connecticut-based head of trading at Faros. “All countries in Asia will likely back down from physical intervention over the next few weeks as doing so is not wise politically given the comments this past weekend.” To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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