“The dollar fell against the majority of its most-traded peers amid bets Federal Reserve Chairman Ben S. Bernanke will signal the central bank plans to maintain bond purchases that risk debasing the currency.
Europe’s 17-nation currency traded at almost its highest level against the dollar since February and the yen rallied before the U.S. central bank also releases revised economic forecasts. Sweden’s krona rose to a two-month high versus the dollar after the jobless rate unexpectedly fell in May and a government research institute said the central bank won’t cut its main lending rate further.
“The market is expecting Bernanke to express some discomfort with the rise in long-term interest rates and is probably looking for something relatively dovish from the press conference,” said Adam Cole, head of Group-of-10 currency strategy at Royal Bank of Canada in London. “The market is setting itself up for the big event of the day. In the long-run, I expect the yen to strengthen versus the dollar.”
The dollar fell 0.3 percent to 95.08 yen at 7:57 a.m. in New Yorkafter weakening 1.1 percent in the previous two days. Japan’s currency rose 0.2 percent to 127.39 per euro. The euro was little changed at $1.3399 after appreciating to $1.3416 yesterday, the highest since Feb. 13.