By Ruby Madren-Britton and Anna Rascouet Nov. 3 (Bloomberg) -- The dollar and yen strengthened against the euro as stocks fell on evidence banks are struggling to shake off the effects of the financial crisis, damping demand for higher-yielding assets. Australia’s dollar dropped against the U.S. and Japanese currencies as the central bank said interest-rate boosts will come gradually after the increase of a quarter-percentage point. South Africa’s rand was the only currency to gain versus the greenback among the 16 most-traded currencies tracked by Bloomberg as gold traded at almost a record high. “It’s primarily an outcome of risk appetite and equity performance, which is tending to weigh on the euro and support the dollar,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. The dollar appreciated 0.9 percent to $1.4649 per euro at 9:03 a.m. in New York, from $1.4775 yesterday. The yen climbed 0.8 percent to 132.23 per euro, from 133.32. The dollar was little changed at 90.27 yen, compared with 90.21. Implied volatility on major currencies climbed to 14.27 percent, the highest level since July 13, according to data compiled by JPMorgan Chase & Co., indicating traders predict wider price swings in coming months. Volatility tends to pick up in a period of economic uncertainty. The rand advanced 0.5 percent to 7.8258 per dollar. Gold gained earlier as India bought 200 metric tons of the precious metal from the International Monetary Fund for $6.7 billion as a hedge against the slumping dollar. Gold traded at $1,060.13 an ounce, after rising to $1,066.35 earlier. It reached a record $1,070.80 an ounce in London on Oct. 14.

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