Dollar down for second straight week

The dollar was headed for a second weekly decline versus the yen amid speculation that the Federal Reserve will take additional steps to shore up a sluggish US economy. The euro maintained a three-day gain versus the dollar, which fell to the lowest level since March versus the common currency. The US currency is down 1.2% against the yen and 1.6% versus the euro this week. Asian currencies were set for a fifth weekly advance versus the greenback, the longest winning streak since March, after data showed that China’s manufacturing activity improved. The dollar touched US$1.3764 against the euro, the weakest level since March 17. The US currency fell to 83.16 yen, the lowest level since Japan intervened in foreign-exchange markets on Sept. 15. The euro rose against the yen.



The Bloomberg-JPMorgan Asia Dollar Index climbed to a two-year high after a report showed China’s purchasing managers’ index (PMI) rose to 53.8 in September from 51.7 in August. The median forecast was for a reading of 52.5. Meanwhile, US Treasury Secretary Timothy F. Geithner said that he was confident tensions over the yuan won’t lead to escalating trade sanctions or feed into a broader global currency conflict with China. The US House of Representatives this week approved a bill that would let companies petition for duties on imports from China to compensate for the effect of an undervalued yuan.