By Oliver Biggadike and Ye Xie Oct. 7 (Bloomberg) -- The dollar rose against the euro for the first time in four days on speculation the U.S. currency’s decline was too fast to sustain. “Nothing goes up forever,” said Andrew Chaveriat, a technical strategist at BNP Paribas SA in New York. “The market’s having a choppy pullback.” Russia’s central bank probably bought $750 million to $1 billion as it sought to stall the ruble’s advance from the strongest level this year against the dollar, traders said. The dollar appreciated 0.2 percent to $1.4687 against the euro at 10:27 a.m. in New York, from $1.4722 yesterday, when it reached $1.4762, the weakest level since Sept. 24. The dollar was little changed at 88.93 yen, compared with 88.82, after earlier reaching 88.01, the lowest level since Jan. 23. The euro fell 0.1 percent to 130.62 yen, from 130.76. Bank Rossii intervened as the ruble touched 36.10 and 36.05 against the target dollar-euro basket, buying about $1 billion today after purchasing as much as $1.5 billion yesterday, said Alexey Borichev, head of foreign-currency trading at ING Groep NV in Moscow, citing trading flows. The regulator probably bought about $750 million today at 36.10 against the basket and a total of $1.4 billion yesterday, said Kirill Grishanov, head of foreign-currency trading at ZAO Promsvyazbank, Russia’s third-biggest private lender. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, rose after three days of declines, adding 0.1 percent to 76.434. Outlook for Dollar Deutsche Bank AG, the world’s biggest currency trader, reduced its 2010 dollar-euro forecast by 18 percent on speculation the Federal Reserve will trail other central banks in increasing interest rates. The dollar will trade at $1.40 per euro by the end of next year, after weakening to $1.55 in the first quarter, the bank said today. The previous forecast was $1.15. “The U.S. consumer is hampered by large debts and won’t be able to lead the nation out of recession in a strong way, so the Fed will keep rates low in order to support the household sector,” Bilal Hafeez, global head of currency strategy at Deutsche Bank in London, said in an interview. “The Fed is going to err on the side of caution in terms of exiting policy.” The yen rose earlier to the highest level against the dollar since January as Japan’s Finance Minister Hirohisa Fujii signaled that policy makers are comfortable with their currency’s strength. ‘Yen’s Movements’ “If the yen’s movements become abnormal or disorderly, we will need to consider some action,” Fujii said at a news conference in Tokyo today, reiterating remarks made over the past week. “But now is the time to calmly watch the currency markets.” The yen gained 4 percent in the past month versus the dollar, threatening the economic recovery by making exporters’ products more expensive and eroding profits earned abroad. The currency may keep climbing, “making things tough again next year,” Michiyoshi Mazuka, president of Fujitsu Ltd., said yesterday at a trade fair just outside Tokyo. Goldman Sachs Group Inc. recommended buying India’s rupee against the dollar as the central bank allows a stronger currency to help temper inflation. The rupee, the third-best performer this year among the 10 most-traded currencies in Asia excluding Japan, rose to the highest in more than a year after Reserve Bank of India Governor Duvvuri Subbarao said in Istanbul on Oct. 5 he may need to tighten monetary policy earlier than advanced economies. Wholesale prices rose the most since the end of May in the week ended Sept. 19. Subbarao will review monetary policy on Oct. 27. ‘Rupee Appreciation’ “We expect higher inflation to allow the RBI to be more tolerant of rupee appreciation,” Goldman Sachs analysts, who weren’t identified, wrote in a report today. They predicted the rupee will rise to 44 per dollar as an “initial target.” The rupee rose 0.4 percent to 46.68 per dollar. It earlier jumped to 46.49, the strongest level since September 2008. Analysts surveyed by Bloomberg predict it will reach 45.95 by the end of June. New Zealand’s dollar dropped 0.2 percent to 73.26 U.S. cents after reaching 73.98, the highest level since July 2008. Auckland-based Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, said milk powder prices were at a 13- month high.

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