Dollar advances as Fed leaves stimulus unchanged; aussie climbs

The dollar gained versus the euro as the Federal Reserve maintained asset-purchase programs without suggesting it’s closer to boosting stimulus, reducing concern additional measures will debase the currency.

The shared currency fell against most major peers as a gauge of German business confidence sank to its lowest since February 2010. The euro’s losses were limited amid speculation Greece will get its next installment of aid. Australia’s dollar climbed after an industry report signaled the slowdown in Chinese manufacturing was waning. The Fed is buying $40 billion of debt a month in its third round of quantitative easing.

“It’s still a strong-dollar environment,” said David Mann, regional head of research for the Americas at Standard Chartered in New York. “It was a clear message of steady as she goes. There have been some better numbers, and none of that is wavering their determination to follow through on QE3.”

The dollar gained 0.2 percent to $1.2961 per euro at 3:50 p.m. New York time and touched $1.2921, the strongest level since Oct. 15. It was little changed at 79.79 yen. Europe’s shared currency fell 0.3 percent to 103.41 yen.

The greenback has advanced 1.2 percent over the past week, the best performer on the Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The euro slipped 0.1 percent, and Sweden’s krona lost 0.5 percent.

The krona slid for a fourth day against the dollar after a report showed Swedish consumer confidence worsened. The National Institute of Economic Research said a sentiment index declined to negative 2.9 in October from 2 the previous month. The median prediction of economists surveyed by Bloomberg News was for 1.7.

The krona lost 0.7 percent to 6.6926 per dollar and fell 0.5 percent to 8.6748 per euro.

Aussie Gains

Australia’s dollar strengthened 0.7 percent to $1.0337 and rose 0.6 percent to 82.48 yen after an industry report signaled a slowdown in Chinese manufacturing was abating. China is Australia’s biggest trade partner.

HSBC Holdings Plc and Markit Economics said a preliminary reading of a purchasing managers’ index for China climbed to 49.1 in October from 47.9 last month.

The euro pared its decline against major counterparts after a report that officials of the European Union, European Central Bank and International Monetary Fund rejected a German proposal to tighten Greek access to an aid account. ECB President Mario Draghi said the so-called troika has made no proposals yet on Greece. The officials have discussed an agreement that would pave the way for the next payment of aid funds to the debt- stricken country.

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