Canada’s dollar is emerging as the Group of Seven currency with the most at stake as traders debate the effect of the U.S. Federal Reserve’s decision today to reduce its unprecedented monetary stimulus.
The Swiss franc rose against all of its 16 most-traded peers, reaching a record against the euro, as investors sought safety on concern an austerity plan to stabilize Greece won’t resolve Europe’s sovereign-debt crisis.
Reserve Bank of Australia Governor Glenn Stevens, who cut interest rates twice last year to help manufacturers and consumers, is diverging from traders expecting a mining boom to lift the local currency to the most in more than 20 years.
European government bonds advanced this week, with Italian and Irish yields falling to the lowest levels on record, as prospects of further European Central Bank stimulus fueled demand for the region’s debt securities.
The euro fell to a one-month low against the yen and slumped versus the dollar on concern Italy’s new government will struggle to win enough support to prevent the region’s debt crisis from engulfing the nation.
The dollar fell to its lowest level since November against the currencies of six U.S. trade partners on bets the European Central Bank will be more aggressive than the Federal Reserve about controlling inflation.