American focus: dollar weakened against most its major counterparts

The dollar weakened against most its major counterparts amid better-than-forecast factory data from China and bets the U.S. central bank will add to monetary stimulus.

The U.S. currency fell versus the euro and the yen before the Federal Reserve starts a policy meeting tomorrow amid forecasts it will expand bond-buying plans.

The U.S. Federal Open Market Committee meets for the last time this year on Dec. 11-12. It will consider whether to expand purchases of assets after its so-called Operation Twist program of swapping $45 billion a month in short-term Treasuries for long-term debt expires this month.

Japan’s currency touched the highest in almost two weeks versus the euro after Italy’s Prime Minister Mario Monti said he intends to resign. Mexico’s peso advanced after a report showed exports increased 13 percent from a year earlier.

Italy’s Monti will attempt to convince his coalition, which includes his predecessor Silvio Berlusconi’s People of Liberty Party, to vote to pass budget legislation before handing in his “irrevocable resignation,” national President Giorgio Napolitano’s office said Dec. 8.

Canada’s dollar strengthened after the government approved Cnooc Ltd.’s $15.1 billion purchase of energy company Nexen Inc. and signed off on Malaysian Petroliam Nasional Bhd.’s purchase of Progress Energy Resources Corp. on Dec. 7.