By Lukanyo Mnyanda and Ye Xie Oct. 20 (Bloomberg) -- The euro approached an advance above $1.50 for the first time in 14 months as better-than-forecast corporate earnings added to evidence the economic recovery is gaining traction, increasing demand for higher-yielding assets. The 16-nation currency also gained on speculation policy makers’ concern that the dollar’s weakness will slow Europe’s growth won’t lead to official action to shore up the greenback. Japanese Finance Minister Hirohisa Fujii repeated his reluctance to intervene in the foreign-exchange markets to halt his currency’s recent gains. “It looks extremely bullish for the euro, especially with risk sentiment continually on the up,” said Elizabeth Gregory, a markets strategist in Geneva at ACM Advanced Currency Markets, which handles about $150 billion of foreign-exchange trades a month. “Very little is being physically done about it, and it looks like the dollar is being allowed to slide.” The euro traded at $1.4970 at 8:38 a.m. in New York, compared with $1.4965 yesterday, after rising earlier to $1.4994, the highest level since August 2008. The yen gained 0.3 percent to 90.27 per dollar, from 90.55. Japan’s currency was at 135.10 per euro, compared with 135.51. Peoria, Illinois-based Caterpillar Inc., the world’s largest maker of construction equipment, reported third-quarter profit of 64 cents a share today. The average estimate of analysts in a Bloomberg survey was 5 cents a share. “We have better-than-expected earnings for a number of companies,” said Steven Butler, director of foreign-exchange trading at Scotia Capital Inc. in Toronto. “The market is taking risk again. If the euro can take out $1.5010, then it will have some momentum.” Dollar Versus Yen The dollar fell against the yen as reports showed builders in the U.S. broke ground in September on fewer houses than anticipated and wholesale prices in the U.S. unexpectedly fell. European Central Bank President Jean-Claude Trichet said officials in the euro area take seriously the U.S. commitment to prevent the dollar from depreciating too much. “We all note with considerable attention that the statements make by American authorities as regards their support in favor of a strong dollar,” Trichet told reporters in Luxembourg yesterday after a meeting of European finance ministers. He also echoed the Group of Seven statement that “excessive volatility and disorganized developments in the exchange market was bad for economic development.” The euro gained almost 20 percent against the dollar since February, making the region’s exports more expensive to overseas buyers and threatening the recovery from the worst recession since World War II. U.S. Treasury Secretary Timothy Geithner said on Oct. 3 that it’s “very important” for the U.S. to have a strong dollar. ‘Little Difference’ “The fact that Trichet does not tire of repeating his warnings of excessive volatility in exchange rates like a broke record makes little difference,” analysts led by Ulrich Leuchtmann at Commerzbank AG in Frankfurt wrote in a client note. As they are unlikely to be followed up with action, they “seem as pointless as similar” recent comments, they wrote. The yen’s strength results from a weaker dollar, stemming from the Federal Reserve’s “easy” monetary policy, Fujii said today in Tokyo. The devaluation of currencies can hurt the global economy, he said. The pound ended its five-day advance versus the dollar as U.K. banking shares slid after Qatar Holding, the Doha-based arm of the Qatar Investment Authority, said it’s halving its stake in Barclays Plc, Britain’s second-largest lender. The currency also fell as a government report showed the country had the biggest budget deficit last month for any September since at least 1993. The U.K. currency was at $1.6432, compared with $1.6421 yesterday, and 91.24 pence per euro, compared with 91.10 pence.

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