2013.09.1105:37:46UTC+00U.S. Dollar pulls back as U.S. considers Syria weapons plan

The dollar backslide versus most of its major counterparts as Secretary of State John Kerry said the U.S. will explore a Russian proposal for Syria to turn over its chemical weapons while looking authorization for military strikes.

Japan's currency sag down against all of its 16 major counterparts for a second day as minutes of the Bank of Japan’s August meeting showed policy makers agreed financial easing was taking effect. Australia’s dollar skyrocketed to the strongest in six weeks as Chinese reports added to indications of recovery in the South Pacific nation’s biggest trading partner. Norway’s krone climbed after inflation accelerated.

Rand Weakens

South Africa’s rand weakened for the first time in five days, retreating from a four-week high, after the nation’s current-account gap widened more than forecast. The currency declined 0.3 percent to 9.9828 per dollar.

Syria Plan

France said it will submit a Russian-backed plan to confiscate Syria’s chemical weapons to the United Nations, as Interfax reported that Bashar al-Assad’s government accepted the proposal.

Yen Analysis

“It seems like the U.S. is considering other options, other than striking, mainly that Russian proposal and I think that’s giving markets more comfort,” Sireen Harajli, a foreign-exchange strategist at Mizuho Bank in New York, said in a telephone interview. “In terms of the effect on the dollar, if that situation intensifies, then you’re going to see safe-haven buying.”

Aussie Strength

“The Aussie dollar is reacting positively to data out of China,” said Takuya Kawabata, an analyst at Gaitame.com Research Institute Ltd. in Tokyo. “Expectations that China’s economic recovery is under way are building.”

Australia’s dollar rose 0.9 percent to 93.12 U.S. cents, the highest since July 24.

Trading in over-the-counter foreign-exchange options totaled $16 billion, compared with $21.1 billion yesterday, according to data reported by U.S. banks to the Depository Trust Clearing Corp. and tracked by Bloomberg. Volume in options on the U.S. dollar-yen exchange rate amounted to $4 billion, the largest share of trades at 26 percent. Options on the Aussie-U.S. dollar rate totaled $2.5 billion, or 16 percent.

Greenback-yen options trading was 37 percent less than the average for the past five Mondays at a similar time in the day, according to Bloomberg analysis. Aussie-U.S. dollar options trading was 5 percent less than average.