The dollar traded 0.1 percent from its lowest level this month against the euro after Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is still needed, reducing demand for U.S. assets.

The greenback has weakened against all but one of its 16 major counterparts this year and Bernanke’s comments added to speculation the Fed will embark on a third round of quantitative easing, or QE3. The yen weakened as Asian stocks extended a global rally in equities. The euro remained higher after a two- day advance against the yen amid optimism European finance ministers will agree to bolster the region’s debt-crisis firewall when they meet March 30.

“The U.S. dollar is going to find it difficult to rally,” said Andrew Salter, a strategist in Sydney atAustralia & New Zealand Banking Group Ltd. (ANZ) Bernanke’s comments “were taken to mean the chances of QE3 were more likely,” Salter said.

The dollar traded at $1.3362 per euro at 10:05 a.m. in Tokyo, little changed from $1.3359 yesterday, when it touched $1.3368, the weakest since Feb. 29. The greenback has declined 3 percent this year against the common currency.

The yen fell to 82.89 per dollar from 82.82 yesterday, when it slid 0.6 percent. The euro rose 0.1 percent to 110.75 yen, after gaining 1.3 percent to 110.65 yesterday.

The MSCI Asia Pacific Index (MXAP) of stocks rose 0.9 percent following a 1.2 percent advance in The MSCI World Index yesterday.

Bernanke’s Comments

Bernanke is scheduled to give a lecture today at George Washington University. The drop in the U.S. jobless rate may reflect “a reversal of the unusually large layoffs that occurred during late 2008 and over 2009,” Bernanke said in a speech yesterday in Arlington, Virginia.

“To the extent that this reversal has been completed, further significant improvements in theunemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.”

The Fed bought $2.3 trillion of securities in two rounds of quantitative easing from December 2008 to June 2011. The U.S. central bank has held its target interest rate to a range of zero to 0.25 percent since December 2008.

Higher-Yielding Currencies

Currencies linked to global growth, including the Australian and New Zealand dollars, remained higher against the yen before U.S. data forecast to show orders for durable goods increased in February.

In the U.S., bookings for long-lasting U.S. factory goods rose 3 percent last month, according to the median estimate of economists surveyed by Bloomberg before the Commerce Department releases its figures tomorrow.

The Australian dollar fetched 87.24 yen from 87.25 yesterday, when it climbed 1.2 percent. New Zealand’s currency, nicknamed the kiwi, added 0.1 percent to 68.23 yen.

“With ample liquidity left in the system, investors are seeking returns from higher yielding assets,” said Yuki Sakasai, a currency strategist at Barclays Capital in New York. “Risk appetite will be boosted because the Fed is maintaining an easing stance while the U.S. economycontinues to perform well. It’s very natural for money to flow into the Australian dollar from the likes of the yen and U.S. dollar.”

The yen has depreciated 11 percent this year, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar was fallen 2.9 percent, the second-biggest drop. The euro has gained 0.4 percent, while the kiwi dollar’s 3.5 percent jump is the biggest advance.

Rescue Funds

Germany’s Chancellor Angela Merkel said yesterday that her country may back plans for Europe’s temporary and permanent rescue funds to run in parallel. Finance ministers will meet in Copenhagen this week to discuss the prospect of combining the temporary European Financial Stability Facility and its permanent successor from July, the European Stability Mechanism.

“It’s certainly a positive for the euro if they manage to expand the bailout mechanism in Europe,” said ANZ’s Salter, who expects the currency to rise to $1.37 by year-end. “The risk discount that has been priced into the euro as a result of the potential for some serious deterioration in sovereign funding would be removed if that bailout package is in place.”

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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