American focus: euro strengthened for a second day against the dollar

The euro strengthened for a second day against the dollar after a German report showed investor confidence jumped this month. The 17-nation currency rose versus all except two of its 16 major counterparts.

Spain sold a combined 3.89 billion euros of 12- and 18- month bills, the central bank said. That compared with its maximum target of 3.5 billion euros. It sold the 12-month securities at an average yield of 2.556 percent, compared with 2.797 percent on Nov. 20.

The ZEW Center for European Economic Research in Mannheim said its index of German investor and analyst expectations climbed to 6.9 this month from minus 15.7 in November. Economists forecast a gain to minus 11.5, according to a survey.

The Dollar Index fell the most in a week as 48 of 49 economists in a survey expect the Federal Reserve will expand its bond buying program at a two-day meeting starting today. The Dollar Index, which tracks the greenback versus the currencies of six U.S. trading partners, fell 0.3 percent to 80.103, the biggest drop since Dec. 4.

The dollar fell against most of its major peers before the Federal Open Market Committee begins its last meeting for 2012 today. The central bank will increase accommodation by announcing $45 billion in monthly Treasury buying in addition to the existing program of $40 billion a month of mortgage-backed securities, according to a Bloomberg survey of economists. That will push its balance sheet almost to $4 trillion.

The Swiss franc fell against the euro as UBS AG joined Credit Suisse Group AG in saying it will charge bank clients for deposits made in the currency. UBS, Switzerland’s biggest bank, said it will start charging financial institutional clients for cash balances held in francs from Dec. 21. The amounts will be communicated individually to clients within days the bank said, adding that “we encourage our customers to keep their Swiss franc balances as low as possible.” The franc dropped last week as Credit Suisse was said to set a negative rate of as much as minus 1 percent on balances held in the currency.