Aug. 6 (Bloomberg) -- The dollar fell against most of its major counterparts as risk appetite increased amid speculation central banks may take further steps to boost economic growth.
The euro pared losses against the yen as German Chancellor Angel Merkel’s government backed the European Central Bank’s bond-buying plan. Stocks rose, with the Standard & Poor 500 Index reaching its highest level since May. Norway’s krone climbed. Sterling declined against all of its 16 most-traded peers after U.K. data showed weakness in the housing market.
“We’ve seen a temporary subsiding in the risk-off trading environment,” Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp, said in a telephone interview. “The market is already very short euros and overly long dollars, so going back to a more neutral basis is consistent with what we’ve seen.” A short position is a bet a security will decline, and a long position a wager it will rise.
The U.S. currency dropped 0.4 percent to 78.17 yen at 1:53 p.m. New York time. The greenback declined 0.1 percent to $1.2398 per euro, after dropping earlier as much as 0.5 percent to $1.2444, the weakest in a month, and rising 0.4 percent. The shared currency sank 0.3 percent to 96.91 yen after touching 97.80 earlier, the strongest level since July 12.
The euro lost 1.1 percent in the past month versus nine developed-nation counterparts tracked by the Bloomberg Correlation-Weighted Indexes. The dollar was the worst performer, falling 2.1 percent, while Sweden’s krona rose the most, 2.8 percent.
The Norwegian krone gained 0.3 percent to 5.9631 per dollar and appreciated 0.1 percent to 7.3958 per euro, and Australia’s dollar rose versus its U.S. counterpart after falling earlier. The Aussie gained 0.1 percent to $1.0580.
The pound fell to a one-month low against the euro after U.K. reports showing weakness in the housing market underlined the fragility of Britain’s economy. The currency dropped 0.3 percent to 79.43 pence per euro after depreciating to 79.63 pence, the weakest level since July 6. Sterling declined 0.2 percent to $1.5613.
The Swedish krona dropped against the euro and dollar after Statistics Sweden said service production fell 0.2 percent from May, when it gained 2.3 percent. Production rose an annual 1.1 percent, compared with May’s 1.9 percent jump.
The krona declined 0.3 percent at 8.3310 against the euro and declined 0.2 percent to 6.7179 per dollar.