The dollar weakened against most of its major counterparts as speculation that Federal Reserve Chairman Ben S. Bernanke may signal further steps to boost the U.S. economy damped demand for safer assets.
The New Zealand and Australian dollars led gains versus the greenback after reports showed manufacturing from China to Europe exceeded economists’ forecasts and before Bernanke’s speech on Aug. 26 in Jackson Hole, Wyoming. The euro trimmed an advance versus the dollar as European stocks pared increases. The yen rose versus the greenback even amid speculation officials will act to curb the Japanese currency’s appreciation.
“You have an overall trend of a weaker dollar,” said Fabian Eliasson, head of U.S. currency sales at Mizuho Financial Group Inc. in New York. “The whole market is just waiting for the Jackson Hole meeting. We might not have seen the last of the Federal Reserve putting more liquidity in the market.”
The Standard & Poor’s 500 Index advanced 1.5 percent. The Stoxx Europe 600 Index was up 0.6 percent after rising earlier as much as 2.2 percent.
Demand for higher-yielding assets gained today as a preliminary gauge of Chinese manufacturing in August slipped to 49.8, according to a reading of the Purchasing Managers’ Index reported by HSBC Holdings Plc and Markit Economics today. The figure was better than the “rumored” number of 45 and may provide some relief to the market, Bank of America Merrill Lynch’s Ting Lu said. A number below 50 shows a contraction.
Germany’s manufacturing purchasing managers’ index was 52 in August, exceeding the 50.6 median forecast in a Bloomberg survey, Markit Economics said separately today. A composite index of euro-area purchasing managers in services and manufacturing also exceeded estimates.