The dollar strengthened after a Chinese Foreign Ministry official
said he hoped the greenback would remain stable and was “not aware” of
a plan to discuss a new reserve currency at next week’s Group of Eight
meeting.
The dollar climbed from a three-week low versus the euro
after falling yesterday when Reuters reported that China had asked to
debate proposals for a new global reserve currency at the G-8 summit in
Italy. China’s central bank in its 2008 review released last week
renewed its call for a new global currency. The restatement of Governor
Zhou Xiaochuan’s proposal in March added to speculation that China will
diversify its currency reserves.
The yen rose from near a
two-week low against the euro on speculation a U.S. report today will
show the world’s biggest economy lost jobs for an 18th month, spurring
demand for the safety of Japan’s currency.
The euro traded near a one-week high against
the pound on prospects the European Central Bank will refrain from
cutting interest rates at a meeting today, maintaining the appeal of
the region’s assets.
The Australian dollar fell against the U.S.
currency and the yen after the trade deficit widened more than
economists forecast, signaling the central bank may keep interest rates
at a 49-year low for an extended period.
EUR/USD fell from $1.4150 to $1.4080.