The dollar fell as risk appetite increased amid speculation central banks may take further steps to boost economic growth.
The euro pared losses as German Chancellor Angel Merkel’s government backed the European Central Bank’s bond-buying plan.
The dollar dropped amid speculation a payrolls gain of 163,000 jobs in July wasn’t big enough to keep the Federal Reserve from taking further steps to spur the economy. Fed policy makers said Aug. 1 after a meeting that they “will provide additional accommodation as needed,” while they refrained from expanding monetary easing this month.
The euro fell earlier versus the yen and dollar after Italy’s Prime Minister Mario Monti said divisions within the 17- nation currency bloc are threatening the European Union’s future.
UBS: “There are probably considerations to see whether Spain requests official EFSF assistance. If that happens, the market would probably welcome it, and it would be another step toward a structural solution for the euro zone.”
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