A gauge of the dollar advanced for the first time in three days as worse-than-forecast China inflation data spurred demand for the U.S. currency as a haven.
The greenback rose against all except two of its 16 major peers amid speculation an improving U.S. economy will spur the Federal Reserve to signal next week it is moving closer to raising interest rates. China’s yuan weakened for a third day. The Australian dollar fell for a 10th session, extending a losing streak that was already the longest since it was freely floated in 1983. New Zealand’s currency declined after Fonterra Cooperative Group Ltd. cut its milk payment forecast.
“A slowdown of inflation in China is boosting expectations for rate cuts and monetary easing,” said Masakazu Sato, a Tokyo-based currency adviser at Gaitame Online Co. “The yuan is being sold while the dollar is bid. The greenback is also benefiting against commodity currencies such as the Aussie hurt by concern China’s economy is slowing.”