The dollar strengthened after a Chinese Foreign Ministry official said he hoped the greenback would remain stable and was “not aware” of a plan to discuss a new reserve currency at next week’s Group of Eight meeting.

The dollar climbed from a three-week low versus the euro after falling yesterday when Reuters reported that China had asked to debate proposals for a new global reserve currency at the G-8 summit in Italy. The yen rose from near a two-week low against the euro on speculation a U.S. report today will show the world’s biggest economy lost jobs for an 18th month, spurring demand for the safety of Japan’s currency.

“The minister’s remarks are definitely supportive of the dollar,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “It’s extremely difficult to move to a new reserve currency. For China, the value of their U.S. holdings would drop.”

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Dollar dropped against the single currency on Wednesday as a rise in global stocks and upbeat manufacturing activity data in Europe and China reduced demand for greenback and yen as safe haven currency. In addition, the Group of Eight sources said that China has asked to debate proposals for a new global reserve currency at next week’s G8 summit in Italy and the issue could be referred to briefly in the summit statement.

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Counterfeit currency worth Rs 3.15 lakh, suspected to be printed in Pakistan and smuggled into the country, was seized from a realtor and his associate in the city on Wednesday. The duo have already circulated Rs 5.85 lakh worth Rs 500 denomination notes in the market.
The counterfeit currency was of highly superior quality and it is almost impossible to make out that the notes are fake, the police said.
The currency had all the security features that are incorporated on the original notes. The kingpin of the racket, Sunil, a resident of Nizamabad is yet to be nabbed.
On a tip-off, South Zone Task Force sleuths nabbed the duo at Barkas on Wednesday and recovered the fake currency.

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The dollar weakened for a fourth day against the euro as Asian stocks advanced on speculation the global recession is easing, damping demand for the U.S. currency as a refuge.

The dollar declined against 14 of the 16 most-traded currencies before a U.S. report that may show consumer confidence rose to a nine-month high, giving investors more confidence to buy higher-yielding assets. The euro extended its winning streak against the greenback to the longest in almost a month on prospects a European Central Bank official may signal today policy makers will refrain from cutting interest rates at their July 2 meeting.

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The Australian and New Zealand dollars fell for the first time in five days after China said the U.S. currency’s may continue to dominate foreign-exchange markets, boosting demand for the greenback.

The Australian and New Zealand currencies extended declines after Japanese reports showed industrial output rose less than economists expected in May and retail sales declined. The U.S. dollar gained against 15 of the 16 major currencies after Guan Tao, deputy head of the international payment department at the State Administration of Foreign Exchange, said the currency’s role is supported by the U.S.’s “super-strong comprehensive national power,” in an article in Chinamoney Magazine.

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The Australian dollar rose after China repeated its call for a new reserve currency, weakening the greenback against major rivals.

Australia’s dollar also strengthened amid signs of a global economic recovery. New Zealand’s dollar fell against the yen after the statistics bureau said gross domestic product declined 1 percent last quarter, exceeding the median estimate for a 0.7 percent contraction in a Bloomberg News survey.

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Canada’s currency weakened to the lowest level since May 19 as stocks fell, making it the worst performer against the U.S. dollar this month among the 16 most- active currencies tracked by Bloomberg.

“The Canadian dollar is a dog with fleas,” said Steve Butler, director of foreign-exchange trading in Toronto at Scotia Capital Inc., a unit of Canada’s third-largest bank. “It has really been an underperformer of late.”

The currency, known as the loonie, weakened 0.2 percent to C$1.1602 per U.S. dollar at 9:06 a.m. in Toronto, from C$1.1576 yesterday. It touched C$1.1638. One Canadian dollar buys 86.19 U.S. cents.

The loonie is down 6 percent since reaching an eight-month high on June 1. Bank of Canada Governor Mark Carney warned at least twice this month that a stronger currency threatens to choke off economic growth.

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The Swiss franc dropped sharply Wednesday against the dollar and euro after what traders said was likely a currency-market intervention.The Swiss National Bank couldn't be reached to confirm.Traders said they saw the SNB buying dollars on the Electronic Broking System, or EBS.The SNB has been warning against excessive Swiss franc strength for months. The central bank has promised to fight the risks of deflation and shrinking economic growth, made worse by a strong currency, which also puts the price of their exports at a disadvantage.

The dollar ended sharply lower after global risk sentiment turned positive again Tuesday, sending the U.S. currency to a succession of multi-week lows against currencies such as the euro, yen and Swiss franc.

The dollar's fall emerged out of a greater appetite for risk following a more risk averse climate Monday.

Investors and market players have been prone to erratic mood swings recently, and their relatively sunnier dispositions Tuesday were reflected in higher crude oil prices and U.S. equity prices that wavered narrowly between positive and negative territory throughout the day.

The U.S. dollar is broadly higher late Monday morning on renewed risk aversion, with the commodity currencies such as the Canadian and Australian dollars in particular are selling off sharply as commodity prices recede.

The euro has trimmed its losses somewhat as market players reverse an earlier rush into short positions against the common currency.

The Australian dollar is trading around 79.17 U.S. cents from 80.57 late Friday, according to EBS. The U.S. dollar is trading around C$1.1540 against its Canadian counterpart from C$1.1339 late Friday.

Uncertainty surrounding the outcome of the U.S. Federal Reserve's open market committee announcement on Wednesday is creating an uncertain mood among investors, which in turn is weighing on stocks and other riskier asset classes including commodities.

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