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Dollar, Yen Gain As Japan’s Trade Gap Widens

“The dollar and yen strengthened after Japan reported a wider-than-estimated trade deficit in July, underlining the fragility of the global economy and boosting demand for safer assets.

The U.S. currency rose the most against the South African rand and Swedish krona after Federal Reserve Bank of Chicago President Charles Evans described a weakening in global trade as “awful.” The euro extended losses against the dollar as Luxembourg Prime MinisterJean-Claude Juncker travels to Greece to discuss the nation’s austerity plans. Australia’s dollar fell as stock declines sapped demand for for higher-yielding assets.

“We’ve had the disappointing Japanese trade data and the dollar is a bit stronger,” said Jane Foley, a senior currency strategist at Rabobank International in London. “The Fed minutes will be closely watched. The dollar will come down if they signal that they will take action.”

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