Dollar Falls to 3-Week Low on Growing Signs of Global Recovery

Jan. 11 (Bloomberg) -- The dollar fell to a three-week low against the euro and slid to the weakest since October versus its Canadian counterpart as signs the global recovery is gaining pace boosted demand for higher-yielding and commodity currencies.

The U.S. currency declined to its lowest level in a month versus the Australian dollar after a Chinese government report yesterday showed exports climbed for the first time in 14 months and imports reached record highs. The yen traded near a one- month low against the euro on speculation the Japanese government will maintain pressure on the central bank to take more policy measures to revive economic growth.

“Risk appetite has improved because of China’s data,” said Sean Callow a senior currency strategist at Westpac Banking Corp. in Sydney. “It’s positive for the Australian and New Zealand dollars.”

The dollar dropped to $1.4488 per euro as of 9:45 a.m. in Tokyo from $1.4409 yesterday in New York, after declining to $1.4495, the weakest since Dec. 17. The greenback slid to C$1.0272 from C$1.0298, after touching C$1.0266, the lowest since Oct. 15. The greenback slipped to 92.30 yen from 92.66 yen. The yen was at 133.53 per euro from 134.46.

Australia’s dollar rose to 93.06 U.S. cents from 92.48 cents, after earlier reaching 93.13 cents, the highest since Dec. 3. New Zealand’s dollar advanced to 73.98 cents from 73.66 cents.

Commodity currencies strengthened after China’s customs bureau said on its Web site yesterday that exports climbed 17.7 percent from a year earlier and imports jumped 55.9 percent in December. Year-on-year comparisons are affected by declines from late 2008 when the global credit crisis deepened.

The Dollar Index, which the ICE futures exchange uses to track the greenback against currencies of six major U.S. trading partners including the euro, declined 0.5 percent today. The index has fallen 14 percent from its March peak as evidence of a global economic rebound prompted investors to buy higher- yielding assets funded with dollars.