The dollar fell, heading for the biggest monthly drop this year against the euro, on speculation gains in stocks spurred demand for higher-yielding assets.
The dollar also weakened versus 14 of the 16 most-traded currencies after South Korea said its national pension fund plans to hold fewer U.S. Treasuries relative to other assets. The yen advanced against the dollar after a Japanese report showed industrial production rose the most in 56 years, fueling optimism funds will flow back into the nation’s stocks. The Australian and New Zealand dollars advanced for a third month as rising commodity prices boosted demand for the currencies.
The dollar declined to $1.4005 per euro as of 7:16 a.m. in London from $1.3941 in New York yesterday, heading for a 5.6 percent loss this month, the most since December. The U.S. currency dropped to 96.70 yen from 96.85. The yen slid to 135.43 per euro from 135.04.
Australia's currency advanced to 79.26 U.S. cents from 78.40 cents yesterday, after reaching 79.28 cents, the strongest since Oct. 2. It has risen 9.2 percent this month, the most since 1985. New Zealand’s dollar climbed to 63.12 U.S. cents from 62.33 cents. It strengthened 10 percent this month.
