By Bo Nielsen Nov. 25 (Bloomberg) -- The dollar dropped to the lowest level against the euro in 15 months and slid versus the yen after the Federal Reserve refrained from voicing concern over the U.S. currency’s decline. The dollar fell to the lowest level since August 2008 against the euro after the Federal Open Market Committee called the dollar’s depreciation “orderly” in minutes of its November meeting released yesterday. The U.S. currency weakened to less than one Swiss franc for the first time since April 2008. The greenback slid against Australia’s dollar as Reserve Bank of Australia Deputy Governor Ric Battellino said the economy has entered a “new upswing,” fueling speculation the central bank will raise rates for a third month in December. “Markets took it as if the Fed gave a green light to sell the dollar,” said Geoffrey Yu, a currency strategist at UBS AG in London. “At the same time, it seems that all central banks are sounding a bit more positive.” The dollar depreciated 0.7 percent to $1.5075 per euro at 8:34 a.m. in New York, from $1.4968 yesterday, after reaching $1.5096, the weakest level since August 2008. The greenback slid to 92.95 cents per Australian dollar, from 91.92 cents. The dollar dropped to 87.67 yen, from 88.50 yen, after declining to 87.39, the lowest level since Jan. 21. The dollar slid as much as 0.9 percent against the franc to 99.94 centimes. Trading may slow before the U.S. Thanksgiving holiday, making the market more volatile, Yu said. Dollar Index IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against currencies of six trading partners including the euro, yen and pound, fell as low as 74.399, the weakest since August 2008, before trading 0.8 percent lower at 74.497. The MSCI World Index of stocks gained 0.6 percent. The decline in the greenback against the yen is “looking like the line of least resistance for further dollar weakness against the majors,” said Lee Hardman, a currency strategist in London at Bank of Tokyo-Mitsubishi UFJ Ltd. “Speculative investors are jumping on the move now too.” Fed officials at their meeting indicated the benchmark lending rate would remain near zero “for an extended period” as long as inflation expectations are stable and unemployment fails to decline. Policy makers note that “some negative side effects might result from the maintenance of very low short-term interest rates.” “With the FOMC minutes reminding the market how long one will wait for a U.S. rate hike and the RBA’s Deputy Governor Battellino making an Australian hike next week look increasingly certain, the night belonged to the Australian dollar, with the U.S. dollar out in the cold once again,” analysts from the Royal Bank of Canada including London-based Adam Cole wrote in a note today. U.K. GDP Adding to signs the global economic recovery is gathering momentum, gross domestic product in the U.K. fell 0.3 percent from the second quarter, less than the 0.4 percent drop initially reported on Oct. 23, according to the Office for National Statistics today. The result matched the median prediction of 28 economists in a Bloomberg survey. The Australian dollar was the second-biggest gainer against the greenback after the RBA’s Battellino told a conference in Melbourne that “it is reasonable to assume that we will see this growth extended for a few more years yet.” “The idea that the central bank can say the economy has entered a new upswing which could last for a few more years is pretty optimistic,” said Robert Rennie, head of currency research at Westpac Banking Corp. in Sydney. “There’s a fairly strong and consistent message coming from the RBA. We expect them to raise 25 basis points next week.” ‘Bullish Remarks’ There’s a 76 percent chance the RBA will increase borrowing costs when it next meets on Dec. 1, according to a Credit Suisse Group AG index based on swaps. This month, Australia became the only nation to boost borrowing costs twice this year. “The bullish remarks from the RBA also added to the revival of risk demand,” said Tomohiro Nishida, a foreign- currency dealer in Tokyo at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh-largest banking group. Futures contracts on the Chicago Board of Trade showed a 30 percent chance the Federal Reserve will raise rates by June, down from 67 percent odds a month ago. Benchmark rates are 3.5 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits. Currency Devaluation Japanese Finance Minister Hirohisa Fujii said the yen is gaining because of weakness in the dollar. “It’s all because of the U.S. dollar,” Fujii told reporters today in Tokyo, without elaborating. He has said low interest rates in the U.S. are behind the currency’s drop. The yen has advanced 7.4 percent against the dollar in the past three months. Some of the gains were spurred by Fujii’s remarks that he opposed “easy intervention” into markets to weaken the yen. He has since toned down his comments, saying Japan will act if the currency moves in an “abnormal or disorderly” way. Japanese authorities haven’t stepped into the currency market since the first three months of 2004. Vietnam’s central bank devalued its currency and raised interest rates to rein in accelerating inflation and a widening trade deficit. The State Bank of Vietnam set a dong reference rate for tomorrow that is 5.2 percent lower, at 17,961 per dollar, compared with 17,034 today, it said in a statement. Policy makers narrowed the dong’s daily trading band to 3 percent, from 5 percent, effective tomorrow, and increased the benchmark rate for the first time since January, to 8 percent To contact the reporter on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net

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