The dollar declined to a four-month low against the euro and weakened versus the yen on speculation the U.S. may lose its AAA credit rating. The dollar headed for its biggest weekly drop in two months versus the euro after Standard & Poor’s yesterday cut its outlook on the U.K.'s AAA credit rating, and Pacific Investment Management Co.'s co-chief investment officer Bill Gross said the same will happen to the U.S. "eventually."
The yen rose to a nine-week high versus the dollar after Japan's Finance Minister Kaoru Yosano said the government won’t intervene in the currency market and the Bank of Japan raised its economic assessment.
The dollar declined to $1.3959 per euro as of 7:44 a.m. in London, after dropping to $1.3971, the weakest since Jan. 2. The U.S. currency has slumped 3.3 percent this week, heading for the biggest loss since the five days to March 20.
The yen advanced to 94.07 per dollar, after reaching 93.87, the strongest level since March 19. Japan’s currency is heading for a 1.2 percent gain this week. The yen fell to 131.40 versus the euro from 131.15. Norway’s krone advanced 0.8 percent to 6.3393 per dollar, the biggest gain among major currencies versus the greenback.
Gold traded near the highest in two months, set for a third weekly increase, as the dollar fell against the euro, boosting the appeal of the precious metal as an alternative investment. Immediate-delivery gold was little changed at $952.45 an ounce at 12:27 p.m. in Singapore after touching $956.55 yesterday, the highest since March 23. The metal has climbed about 7.2 percent this month and is about 19 percent higher than this year’s low of $802.59 an ounce. Silver, which dropped 0.2 percent to $14.49 an ounce, is still up 3.5 percent this week.
