Currency volatility falls to 10-week low on Fed bets

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The dollar remained higher versus the yen as the Federal Housing Finance Agency reported house prices in the U.S. rose 0.7% in May, following a revised 0.5% advance the previous month. Economists in a Bloomberg survey forecast an increase of 0.8%.

The dollar has risen 4.8% this year, versus the euro’s 4.7% advance and lagging behind only the Swedish krona among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen is the worst performer, having dropped 11%.

The Japanese currency weakened against most of its major peers today, and Switzerland’s franc declined after Chinese news organizations reported that Premier Li Keqiang’s government sees 7% growth as the minimum acceptable pace of growth, signaling the nation will act to support the economy if needed.

‘Bottom Line’

Expansion below 7% won’t be accepted because China needs to achieve a moderately prosperous society by 2020, according to a commentary published July 21 by the official Xinhua News Agency and credited to reporter Wang Yuewei. Li said at a recent meeting with economists that 7% is the “bottom line” and the nation can’t allow growth below that, the Beijing News reported today.

The Swiss franc fell 0.4% to 94.01 centimes per dollar and 1.2390 per euro.

Indonesia’s rupiah plunged in onshore trading as Bank Indonesia allowed a more rapid slide toward levels quoted in the offshore market.

The rupiah dropped 1.3% to 10,200 per dollar, the biggest drop since June 2012, according to prices from local banks. The currency reached 10,258 earlier, the weakest level since July 14, 2009.

www.bloomberg.com

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