The dollar fell versus most major peers as stocks rose after Federal Reserve Chairman Ben S. Bernanke indicated the economy isn’t weak enough to need immediate stimulus, encouraging demand for higher-risk assets. The Swiss franc tumbled versus the euro as UBS AG said it may levy a temporary excess balance fee to stem the inflow of the currency into its customers’ cash clearing accounts. The Dollar Index had rallied earlier after Bernanke, at a conference in Jackson Hole, Wyoming, failed to signal new measures to shore up the economy that would risk debasing the U.S. currency. “We seem to have shifted from initial risk-off to risk- on,” said Alan Ruskin, global head of Group-of-10 foreign- exchange strategy at Deutsche Bank AG in New York. “Bernanke was at least reasonably optimistic that we weren’t double dipping and heading for a recession in the U.S. People do want to get back into risk, but there is very little commitment.” The dollar fell 0.8 percent to $1.4499 per euro at 5 p.m. in New York, losing 0.7 percent for the week. It depreciated 1.1 percent to 76.64 yen, while the Japanese currency rose 0.2 percent to 111.17 per euro. The Swiss franc dropped 2.5 percent to 1.1690 per euro and touched 1.1736, the weakest level since July 25. It fell 1.7 percent to 80.63 centimes per dollar. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trade partners, fell 0.8 percent to 73.712, from 74.279 yesterday. Earlier it rose 0.3 percent. The greenback slid against all of its 16 most-traded counterparts except Taiwan’s dollar and the Swiss franc. ‘Return to Growth’ Bernanke indicated that, while the economy isn’t deteriorating enough to warrant any immediate stimulus, the central bank still has tools to stimulate growth. “The growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years,” Bernanke told central bankers and economists gathered at the Kansas City Fed’s annual conference in Jackson Hole. “It may take some time, but we can reasonably expect to see a return to growth rates and employment levels consistent with those underlying fundamentals.” The Standard & Poor’s 500 Index climbed 1.5 percent after losing as much as 2 percent, and the Thomson Reuters/Jefferies CRB Index of raw materials increased 1 percent. Last year at the conference, Bernanke said the Fed would do all that it can” to ensure a continuation of the economic recovery and that buying more debt might be warranted if growth slowed. Two months later, policy makers announced a $600 billion second round of asset purchases that ended in June. ‘Work to Weaken’ “Monetary policy will still work to weaken the U.S. dollar,” said Camilla Sutton, chief currency strategist in Toronto at Bank of Nova Scotia’s Scotia Capital unit. “He’s just highlighting, as he’s already said, that the Fed has the tools, and he’s laid them out and they will use them if they need to.” The Fed pledged after a meeting Aug. 9 to hold the benchmark interest rate at almost zero until at least mid-2013 after growth that was “considerably slower” than anticipated. The euro pared earlier gains after a Commerce Department report showed U.S. gross domestic product grew at a 1 percent annual rate from April through June, down from a 1.3 percent prior estimate. The median forecast of economists surveyed by Bloomberg News called for a 1.1 percent increase. The expansion capped the weakest six months of the economic recovery that began in mid-2009. Confidence among U.S. consumers dropped in August to the lowest level since November 2008. The Thomson Reuters/University of Michigan final index of consumer sentiment fell to 55.7, from 63.7 in July, data showed today. Franc’s Strength The dollar has declined 2.1 percent in the past three months against nine developed-nation peers, according to Bloomberg Correlation-Weighted Currency Indexes. The euro has appreciated 0.6 percent and the yen has gained 4.5 percent. The Swiss franc strengthened the most, 5.9 percent. The franc extended a third weekly loss against the euro on speculation Swiss policy makers will introduce new measures to cap its gains and that local banks may start charging customers for franc deposits. Zurich-based UBS said it may levy a temporary excess balance fee to curb the inflow of Swiss francs, citing “the prevailing market conditions which in particular affect the Swiss franc.” It commented in a note to bank clients sent via the Swift system and confirmed to Bloomberg. ‘Pay for the Privilege’ “If you are going to have to pay for the privilege to have that deposit, that’s going to dis-incentivize some,” said Jens Nordvig, a managing director of currency research in New York at Nomura Holdings Inc. “For the Swiss franc it really matters, because the bulk of the money is parked in deposit form.” The yen advanced for the first time in three days versus the dollar as Japanese Prime Minister Naoto Kan said he was stepping down after parliament passed the final two pieces of his legislative agenda. New Zealand’s dollar was the biggest winner against the greenback, climbing 1.7 percent to 84.07 U.S. cents. To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; John Detrixhe in New York at jdetrixhe1@bloomberg.net. To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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