Oct. 22 (Bloomberg) -- The dollar rose from almost a 14- month low against the euro on speculation the U.S. job market will be slow to recover and China will end fiscal and monetary stimulus, reducing risk demand. South Africa’s rand tumbled against the dollar on a news service report that the government may “freeze” the exchange rate to halt the currency’s gain. A spokesman denied such a plan. Sweden’s krona fell against the dollar and euro after the Riksbank kept the benchmark interest rate at a record low. “Without the job market improving, without wage growth, you are not going to see consumption come through,” said Mark Konyn, who helps oversee about $11 billion as chief executive officer in Hong Kong at RCM Asia Pacific Ltd., in an interview on Bloomberg Television. “The dollar in the short term is probably oversold.” The dollar strengthened 0.2 percent to $1.4989 per euro at 10:25 a.m. in New York, from $1.5016 yesterday, when it touched $1.5046, the weakest level since August 2008. The yen slid 0.7 percent to 91.58 per dollar, from 90.97. The yen declined 0.4 percent to 137.15 per euro, from 136.61. The U.S. currency weakened beyond $1.50 versus the euro yesterday for the first time since August 2008 as signs of economic recovery encouraged investors to sell the greenback and buy higher-yielding assets. The dollar reached a 2 1/2-year high against the euro on Oct. 28, 2008, as investors sought the safety of U.S. government debt after the Sept. 15, 2008, bankruptcy of Lehman Brothers Holdings Inc. froze credit markets. Fed Rate Outlook The U.S. currency may remain under pressure as the Federal Reserve trails other central banks in increasing borrowing costs. The dollar will trade at $1.50 at year-end, according to the median forecast of 48 analysts in a Bloomberg survey. It tumbled to $1.6038 per euro on July 15, 2008, the weakest since the 16-nation currency’s 1999 debut. The seven-day relative strength index for the euro versus the dollar rose to 74.3 yesterday. A reading above 70 tends to signal a rally in a currency may have reached an extreme and a reversal may be imminent. The rand lost as much as 1.8 percent to 7.5482 per dollar, the weakest level since Oct. 5, after the Sake24 financial news service said without citing anyone that South African Economic Development Minister Ebrahim Patel was preparing “radical” changes that include fixing the exchange rate to stabilize the currency, which has gained 27 percent this year. Government’s Response South Africa’s Cabinet never discussed the option of fixing the exchange rate, a government spokesman, Themba Maseko, told reporters in Cape Town today. Central banks in emerging markets are struggling to find ways to slow their currencies’ appreciation as investors flock to developing countries for higher returns. Brazil announced on Oct. 19 that it’s imposing a 2 percent tax on foreign purchases of fixed-income securities and stocks to curb the real, which appreciated 33 percent this year. The real appreciated 0.1 percent to 1.7321 versus the dollar today after tumbling 2.1 percent the day after Brazil announced the securities tax. The central bank held its Selic target lending rate at a record low of 8.75 percent yesterday and signaled that no increase in borrowing costs is imminent. South Korea’s won weakened 0.9 percent to 1,189 per dollar today after Yonhap News said the nation is studying measures to reduce currency volatility, citing government officials it didn’t identify. The won gained 13 percent against the dollar in the past six months. China’s Economy China reported gross domestic product expanded at the fastest pace in a year and indicated that policy makers will increase their focus on inflation. The nation’s economy expanded 8.9 percent in the third quarter, following a 7.9 percent advance in the previous quarter, China’s statistics bureau said. The median estimate of 34 economists surveyed by Bloomberg was for a 9 percent gain. Inflationary expectations are increasing as prices rise month-on-month, statistics bureau spokesman Li Xiaochao said today at a press briefing in Beijing. The number of Americans filing first-time claims for unemployment benefits increased to 531,000 in the week ended Oct. 17, from a revised 520,000 in the previous week, the Labor Department said. The median forecast of 43 economists in a Bloomberg survey was for an advance to 515,000 from a previously reported 514,000. Sweden’s currency declined 0.8 percent to 6.9047 against the dollar and was 0.7 percent weaker at 10.3407 per euro as the Stockholm-based Riksbank repeated its intention not to raise borrowing costs for another year. Its decision to keep its seven-day repo rate at 0.25 percent was predicted by all 26 economists in a Bloomberg survey. “We expect the krona to stay lower against the euro in the wake of the Riksbank’s dovish remarks,” said Roberto Mialich, a senior global-currency strategist in Milan at UniCredit SpA. To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

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