The euro rose the most against the dollar in two weeks as the European Central Bank lowered its benchmark interest rate less than forecast and deferred a decision on what else it can do to rescue the economy.
The yen and dollar fell against all of the other major currencies on reduced demand for safety as U.S. accounting regulators approved a rule change that may boost bank profits and leaders of the Group of 20 nations pledged more than $1 trillion in emergency aid. Japan’s currency dropped to a five- month low near 100 versus the dollar.
“It’s not surprising to see the euro pop up,” said Paresh Upadhyaya, who helps manage about $30 billion in currency assets as a senior vice president at Putnam Investments LLC in Boston. “The ECB neither advocates nor rules out unconventional measures. The market has entered into a new phase of risk- seeking behavior. The dollar will remain under pressure across the board.”
The euro rose as much as 2 percent to $1.3517, the biggest intraday advance since March 18, before trading at $1.3446 at 4:01 p.m. in New York. The 16-nation currency climbed 2.5 percent to 133.84 yen from 130.52. The dollar appreciated 1 percent to 99.54 yen from 98.53 after touching 99.90, the highest level since Nov. 5. read more
