By Bo Nielsen and Anchalee Worrachate Nov. 9 (Bloomberg) -- The dollar weakened beyond $1.50 against the euro for the first time in two weeks after the Group of 20 nations remained silent on the U.S. currency’s 7 percent decline this year and agreed to maintain stimulus measures. The Dollar Index dropped to the lowest level since Oct. 23 on increased demand for riskier assets as Germany’s exports climbed in September more than economists forecast. The pound rose to a three-month high on speculation Kraft Foods Inc. may boost its 9.8 billion pound ($16.5 billion) bid for Cadbury Plc by today’s deadline to keep the takeover attempt alive. “The G-20 didn’t make any comments about recent dollar weakness, so the market continues to sell the U.S. currency,” said Antje Praefcke, a foreign-exchange strategist at Commerzbank AG in Frankfurt. “Overall sentiment has improved, and we expect the euro to extend gains against the dollar.” The dollar depreciated 1 percent to $1.4996 per euro at 7:29 a.m. in New York, from $1.4847 on Nov. 6. It touched $1.5011, the weakest level since Oct. 26. The euro advanced 1.1 percent to 134.88 yen, from 133.45. The dollar was little changed at 89.96 yen, compared with 89.88. U.S. payrolls fell by 190,000 last month, more than the median forecast of economists, the Labor Department reported on Nov. 6. The jobless rate rose to 26-year high of 10.2 percent. The number “left the dollar vulnerable for further downside this week with the report a classic example of what’s bad for the dollar -- not too strong to change expectations on Fed monetary policy and not too weak to foster risk aversion,” Derek Halpenny, European head of global currency research in London, wrote in an e-mailed report today. G-20 Meeting Chancellor of the Exchequer Alistair Darling, host of a meeting in Scotland of finance ministers from G-20 nations, said his colleagues decided to keep supporting their economies. “We agreed to maintain support for the recovery until it is assured,” Darling said on Nov. 7. “We are not out of the woods yet.” The euro strengthened versus the dollar as German industrial output expanded 2.7 percent in September in a second month of gains. The advance was above the 1 percent median estimate of economists in a Bloomberg survey. Exports from Germany, the euro region’s largest economy, rose 3.8 percent in September from August, the Federal Statistics Office in Wiesbaden said today. The median forecast of economists in a separate Bloomberg survey was for a 2.5 percent increase. ‘Risk Appetite’ “The risk appetite side of the equation is now very much back on the front foot, whereas a couple of weeks ago everyone was concerned about the pace of global recovery,” said Stuart Bennett, a senior currency strategist in London at Calyon, the investment-banking arm of Credit Agricole SA, in an interview on Bloomberg Television. “The dollar will stay on the weak side.” The yield advantage of 10-year German bunds over the similar-maturity Japanese government debt was 1.87 percentage points today, compared with 1.85 percentage points a week ago. The pound jumped as much as 1.4 percent to $1.6843, the highest level since Aug. 6. U.K. regulators have set a deadline of today for Kraft to make a formal offer for Cadbury or walk away for six months. Kraft proposed 300 pence in cash and 0.2589 new Kraft share per Cadbury share on Aug. 28, an offer worth 717 pence based on Nov. 6 closing prices. Cadbury rejected that as an “unappealing prospect” from a “low-growth” conglomerate. New Zealand’s currency advanced against all 16 major counterparts after Fonterra Cooperative Group Ltd. said today it will probably pay its 10,500 farmer-shareholders NZ$6.05 ($4.46) for each kilogram of milk supplied in the year to May 31. That would be the second-highest since Fonterra paid a record NZ$7.90 a kilogram in the year ended May 2008. Fonterra’s Stake Fonterra accounts for about 40 percent of the global trade in butter, milk powder and cheese and sells products in more than 140 countries. New Zealand’s currency rose as much as 2 percent to 73.97 U.S. cents, the highest level since Oct. 28. It gained as much as 2.2 percent to 66.60 yen. The Dollar Index, which tracks the greenback against currencies of six major U.S. trading partners, fell to 74.997, from 75.819 on Nov. 6. It touched 74.977, the lowest level in more than two weeks. The U.S. currency was under pressure after the International Monetary Fund said traders are probably using the dollar to fund so-called carry trades around the world and it may still be overvalued. The IMF said in a report published on Nov. 7 that while the dollar “has moved closer to medium-run equilibrium,” it’s still “on the strong side.” Benchmark interest rates of 0.1 percent in Japan and as low as zero in the U.S. make the yen and dollar favored targets for investors seeking to fund carry trades. To contact the reporters on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net; Anchalee Worrachate in London at aworrachate@bloomberg.net

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