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Russia is unlikely to change the structure of its reserves from dollars and euros even as currencies including the yuan gain more importance in regional trade, VTB Group Chief Executive Officer Andrei Kostin said.

“Inevitably with the growth and importance of other economies like China or other BRIC countries’ economies, the role of their currencies should be more important,” said Kostin, who heads Russia’s second-biggest bank, in an interview yesterday in Singapore. “We think that the yuan and the ruble can be currencies in which we conduct bilateral trade. But as a reserve currency, I think the central bank is still dividing mainly between the dollar and the euro.”

The ruble gained 0.2 percent against the euro to 42.8600, the strongest level in almost ten months, at 1:12 p.m. in Moscow. The Russian currency was little changed against the dollar.

Russia has sought to promote regional currencies in trade and finance to reduce the risks posed by the dominance of the dollar. Medvedev has blamed the global financial crisis on an over-reliance on the U.S. currency and the U.S. role in the financial system.

“Things are changing for sure and I think the crisis showed the weaknesses of being dependent on only one currency,” said, Kostin who was accompanying President Dmitry Medvedev at the Asia-Pacific Economic Cooperation forum. ‘There is more concern among many investors, even in Russia, that America is printing too much money and that could devalue it.”

State-run VTB is Russia’s second-biggest bank after OAO Sberbank.

Border Arrangements

Prime Minister Vladimir Putin traveled to China last month to strengthen a relationship forged by Russian oil exports to Asia’s largest energy consumer. The total value of oil deals signed with Chinese companies this year is about $100 billion, according to the Russian government.

China, the world’s fastest-growing major economy, has signed 650 billion yuan ($95 billion) in currency-swap agreements since December with Argentina, Belarus Hong Kong, Indonesia, Malaysia and South Korea, encouraging greater use of its currency guaranteed online payday loans.

Russia already has agreements that allow the use of the ruble and yuan in cross-border trade, First Deputy Central Bank Chairman Alexei Ulyukayev said on Oct. 23. Russia is also in talks with India and Brazil to use their currencies in trade.

Dominique Strauss-Kahn, the managing director of the International Monetary Fund, said today that the yuan may in future be added to the basket of currencies that set the value of IMF monetary units, called special drawing rights.

Reserve Currency

The yuan may be added in a “while,” Strauss-Kahn said at a press briefing in Beijing today. The move would require the currency to be market-based, he said.

While Chinese officials, including central bank Governor Zhou Xiaochuan, have called this year for an alternative to the dollar as the main reserve currency, they maintain controls on the yuan that prevent it for now from becoming a competitor.

Leaders from the APRC, who met in Singapore over the weekend, declined to back U.S. calls for a stronger yuan.

It’s “not easy” to say when the yuan could become convertible, Kostin said.

The currency could become a global reserve currency in about 10 years should the country make it convertible, Russian Finance Minister Alexei Kudrin said on Oct. 24.

While the yuan cannot be freely exchanged, making it impossible to use it for reserves at present, a change in policy would make the currency a “notable and weighty” global reserve currency given China’s trade volumes with others, Kudrin said.

Russia’s reserves, the world’s third largest holdings, are made up of 47 percent dollars, 41 percent euros, 10 percent pounds and 2 percent yen, Ulyukayev said on Nov. 2.

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The bleeding in the housing market seems to be stanched, at least temporarily, according to home price data released on Tuesday.

Most U.S. cities saw gains in the median price of single-family homes sold during the three months ended Sept. 30, according to the National Association of Realtors’ quarterly report on home prices. This is the second consecutive quarter of gains.

The national median home price was $177,900 in the third quarter, up $7,000 from the previous quarter. And while that down more than 11% from the third quarter of 2008, the pace of decline is slowing. In the second quarter of 2009, home prices fell 15.4% from the same period last year.

"The decline in the national median price has moderated recently," Lawrence Yun, NAR chief economist, said in a statement.

Yun said a shrinking supply of unsold homes suggests the housing market is getting closer to price stabilization. But he cautioned that a steady stream of financially qualified buyers is necessary to keep the fledgling housing recovery going.

NAR attributed much of the recent increase in home prices to the government’s first-time homebuyer tax credit, which has helped revive home sales from a deep slump.

"We can’t underestimate just how powerful a catalyst the first-time homebuyer tax credit has been for the housing sector," Yun said.

While a glut of foreclosed properties will continue to weigh on prices in the months ahead, "rising sales from the expanded tax credit should stabilize home prices by next spring," Yun said payday cash advances.

Despite the positive report, many clouds dot the housing market horizon. The darkest of those is the current employment picture. The latest release from the Bureau of Labor Statistics reported a national unemployment rate of 10.2%.

"An unemployment rate of 10.2% is a strong psychological impediment for anyone thinking of buying a house," said Ingo Winzer, president of real estate research firm Local Market Monitor Inc.

"Housing markets respond as much to psychological factors as to economic ones," he said. "So we won’t see much of a pickup in home buying until the unemployment rate has turned downward."

Cheapest and priciest areas

The Cape Coral metro area in Florida recorded the largest decline: 40% to $98,000. the Cumblerland area Maryland and West Virginia had the biggest gain: 19.2% to $122,100.

The lowest-priced market in the nation is now Saginaw, Mich., where the median home sold for $61,400 during the quarter, a 6.7% drop over last year. The most expensive market was San Jose, Calif., with a median price of $566,000 — although that’s still a 12.9% discount from a year ago.  

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Treasury Secretary Timothy Geithner on Saturday stressed the necessity of keeping global economic stimulus in place until recovery is assured and opposed the utility of a tax on financial transactions as a way to dampen risky bank behavior.

Speaking at the conclusion of a two-day meeting of Group of 20 finance minister and central bankers, Geithner said there was broad agreement that “growth remains the dominant policy imperative across our economies.”

He said high U.S. unemployment, which hit a 26-1/2-year high at 10.2 percent of the civilian workforce in October, highlighted a “very tough economic environment” that will a period of sustained growth to correct.

Earlier, British Prime Minister Gordon Brown had suggested that the G20 should levy on banks — blamed for the excessive risk-taking that led the world into a now-easing financial crisis — and used the proceeds to fund future bailouts.

Geithner played down that idea, noting that the Obama administration was already pushing an overhaul of financial market rules in Congress that would ensure that banks pay the costs of their failures in future from their own pocket.

“A day-by-day financial transaction tax is not something we are prepared to support,” Geithner said in an interview with Sky News. In his concluding press conference, Geithner was asked repeatedly to say why he opposed such a tax on banks and indicated he doubted its effectiveness.

“This idea (of a bank transaction tax) has been around for a long time…I think frankly the experiences are mixed,” he said, expressing an American view that there was no widespread backing for such a tax.

Canadian Finance Minister Jim Flaherty was similarly skeptical.

“It’s one of the ideas that’s on the table, but is not particularly attractive to me as finance minister of Canada. We have been a government that has been reducing taxes,” Flaherty said.

ON DANGEROUS GROUND

Geithner’s key message was that recovery still remains on perilous ground and that it was too soon to discuss the timing for removing the massive fiscal and monetary stimulus that countries around the world have poured into their economies.

“Government policy has to provide a bridge to growth led by the private sector,” he said. “We’re now in the middle span of that bridge.”

That meant policymakers must move cautiously in trying to bring down huge budget deficits without choking off chances for growth led by consumer spending and business investment.

“If we put the brakes on too quickly we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater,” Geithner said.

“It’s too early to start to lean against recovery.” 

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U.S. business productivity grew at its fastest clip in six years in the third quarter and new claims for jobless aid fell to a 10-month low last week, suggesting the labor market may be starting to bottom out.

The Labor Department said on Thursday that productivity surged at a 9.5 percent annual rate, the quickest pace since the third quarter of 2003, as companies squeezed more output from a smaller pool of labor to hold the line on costs.

The Labor Department also reported that initial claims for state unemployment benefits dropped to 512,000 in the week ended October 31, the lowest level since early January. Markets had expected a decline to only 523,000, from the 530,000 reported in the prior week.

Some healing of the labor market is crucial to sustaining and strengthening the economy’s recovery after its worst recession in 70 years, with employment key to underpinning consumer spending.

Analysts doubt that the rapid growth rate in productivity, which measures the hourly output per worker, can be sustained, which some analysts say means businesses may soon have to step up hiring to meet the demand for their goods and services.

“We expect the pace of efficiency gains will soon begin to fade,” said Michelle Girard, a senior economist at RBS in Greenwich, Connecticut. “Having cut payrolls so dramatically during the last downturn, we believe that companies will be forced to add workers earlier in this recovery than was the case following the last two recessions.”

U.S. stocks rallied on the reports, with the productivity data viewed as good news for company earnings. The blue chip Dow Jones industrial average gained more than 2 percent and closed above the 10,000 threshold for the first time in about two weeks payday loans for bad credit.

Financial markets had expected productivity to rise at a 6.4 percent rate. It grew at a 6.9 percent pace in the April-June period, when the economy was still contracting.

MUTED INFLATION PRESSURES

The U.S. Federal Reserve on Wednesday held overnight interest rates close to zero percent and said it would keep them extraordinarily low as long as excess economic slack and a lack of inflation warning signs prevailed.

The U.S. economy grew in the third quarter for the first time in more than a year, driven largely by government stimulus. The strong productivity report suggested there was little need to worry about inflation at this juncture.

Unit labor costs, a measure of the cost of labor for any given amount of production, fell 5.2 percent last quarter after declining 6.1 percent the previous period. Analysts had forecast a drop of only 4 percent.

“Solid productivity growth provides the basis for a recovery in business earnings and investment in the second half of 2009, and keeps a firm lid on prices and inflation,” said Brian Bethune, chief U.S. financial Economist at IHS Global Insight in Lexington, Massachusetts.

“They provide the Fed more room to keep rates exceptionally low for an extended period in order to coax the economy through the fragile recovery period over the next year and ultimately to an expansion mode.”

Productivity in manufacturing rose at a record 13.6 percent rate in the third quarter, likely driven by automakers ramping up production to rebuild depleted stocks after the popular “cash for clunkers” program boosted sales. 

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U.S. banks are at risk of sizable new loan losses, particularly on commercial property, and some banks may not have sufficient capital to fully cushion against losses, a Federal Reserve official said on Monday.

Some large regional and community banks that have built up unusually high concentrations in commercial real estate loans will be "particularly affected" by conditions in those markets, said Jon Greenlee, associate director of the Fed’s Division of Banking Supervision and Regulation.

In the second quarter, said Greenlee, "Credit losses at banking organizations continued to rise, and banks face risks of sizable additional credit losses given the outlook for production and employment."

Greenlee’s comments were in testimony prepared for delivery to a House of Representatives Oversight and Government Reform subcommittee.

"Poor loan quality, subpar earnings, and uncertainty about future conditions raise questions about capital adequacy for some institutions," he said.

While the stability of the banking system has improved, it is far from robust as banks face pressures from weakness in both residential and commercial property markets, Greenlee said.

Although year-on-year housing price price declines slowed in the second quarter, foreclosures and mortgage loss severities are likely to remain high, he said.

Delinquencies of mortgages backing commercial mortgage-backed securities have increased markedly in recent months and market participants anticipate the delinquency rates will rise by the end of the year, Greenlee said.

Fed examiners are noticing a sharp deterioration in loans in banks’ portfolios and loans in commercial mortgage-backed securities, he said. 

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General Motors expects to announce a market share gain for the third month in a row in October, GM executive director of corporate planning Mike DiGiovanni told reporters on Wednesday.

October will also mark the first year-over-year sales gain GM has managed in 21 months, DiGiovanni said. In September, GM’s sales were down 47% compared to a year earlier.

"When you look at GM’s performance, we’re having a really good October," he said.

The automaker expects its vehicle sales will amount to 20% to 21% of all vehicles sold that month, he said. He expects those numbers to be about 3% higher than Toyota’s and 4% higher than Ford’s, he said.

DiGiovanni credited strong product introductions for the market share rise. Over the past few months, GM has started production on six new or redesigned models: the Chevrolet Camaro performance coupe, Chevrolet Equinox, GMC Terrain and Cadillac SRX small crossover SUVs, Buick LaCrosse luxury sedan and the Cadillac CTS Sportwagon.

Sales of the new 2010 Chevrolet Equinox crossover SUV are strong enough that the automaker is adding a third shift to the Ontario, Canada factory that builds the Equinox and its sister-vehicle the Terrain easy online payday loans.

"We’ve got enough data now that we feel very confident that adding this third shift is the right ting to do, said Susan Docherty, who was recently appointed to head GM’s sales efforts.

An overall improvement in auto sales will also help GM’s bottom line, DiGiovanni predicted.

The market share rise comes despite the fact that GM has shed four of its former eight brands, DiGiovanni said. Only 5% of GM’s October sales came from the four brands that are being shut down, he said, compared to 10% a year ago.

Besides new model introductions, the automaker’s "Truck Month" promotion program has also helped boost sales, Docherty said.

GM still has a much larger percentage of 2009 models on its dealer lots, Docherty said, but part of that is a deliberate strategic decision. The automaker wanted to have more 2009 truck to sell as part of its "Truck Month sales drive. 

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German business confidence probably rose to a 13-month high in October, improving the outlook for growth in Europe’s largest economy.

The Ifo institute in Munich will say its business climate index, based on a survey of 7,000 executives, increased to 92 from 91.3 in September, according to the median of 40 forecasts in a Bloomberg survey of economists. That would be the highest reading since September last year. The index reached a 26-year low of 82.2 in March. Ifo releases the report at 10 a.m. today.

The German government last week increased its forecasts for the economy and now expects growth of 1.2 percent in 2010 after a contraction of 5 percent in 2009. With the recovery likely to be tempered by rising unemployment, the euro’s increase against the dollar and the expiry of stimulus measures, the European Central Bank is reluctant to tighten policy too soon.

“We expect relatively robust growth in the second half of this year as the economy bounces back from recession,” said Andreas Scheuerle, an economist at Dekabank in Frankfurt. “However, the recovery next year will be dull and bumpy.”

Ifo’s gauge of the current situation will increase to 88 while an index of executives’ expectations will advance to 96.2, according to the survey of economists.

Volkswagen AG, Europe’s biggest carmaker, predicts the worldwide automotive market won’t match pre-recession levels until 2013 at the earliest. “There are growing signs that the worst of the crisis may now be behind us, but it will take time for the markets to recover,” Chief Executive Officer Martin Winterkorn said on Oct. 8.

Fiscal Stimulus

Chancellor Angela Merkel’s government is trying to haul Germany out of its worst recession since World War II with about 85 billion euros ($127 billion) in stimulus measures. Her Christian Democrats are also prepared to cut taxes by 20 billion euros after they form a coalition with the country’s Liberal Democrats, negotiator Steffen Kampeter said on Oct. 16.

“The economy still is on a drip but will return to sustainable growth next year,” said Carsten Brzeski, an economist at ING Groep NV in Brussels, who expects overall output to expand by 2 percent in 2010. “We haven’t seen the election effect so far and the support measures taken are also designed to spur private investment.”

Economic data are mixed. While German factory orders rose for a sixth month in August and industrial output gained, exports unexpectedly fell. Investor confidence declined for the first time in three months in October amid concerns the recovery could falter.

The euro has appreciated 20 percent since mid-February and reached a 14-month high of $1.50 this week, eroding export returns. Rising joblessness may also discourage household spending.

The ECB has cut its benchmark rate to a record low of 1 percent and is lending banks as much money as they want for up to a year in an effort to get credit flowing through the economy of the 16 nations sharing the euro. President Jean-Claude Trichet has repeatedly said that it’s too early to withdraw monetary policy stimulus.

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Australian central bank Governor Glenn Stevens’s view that he can’t be “too timid” in raising borrowing costs is stoking speculation the benchmark interest rate will be increased next month by the most in a decade.

Experience “counsels against” an approach where policy makers who cut rates rapidly in response to a threat become “too timid to lessen that stimulus in a timely way when the threat has passed,” Stevens said in Perth yesterday.

The comments pushed Australia’s currency to a 14-month high and prompted investors to triple bets policy makers will increase the overnight cash rate target on Nov. 3 by half a percentage point to 3.75 percent. Stevens became the first Group of 20 central banker to increase borrowing costs when he unexpectedly boosted the rate last week by a quarter point.

“Stevens has put 50 basis-point moves on the table,” said Matthew Johnson, an interest-rate strategist at UBS AG in Sydney. “The safest time to raise rates quickly is when you know they are at the wrong level, and this is the first time a recession has ended with so little spare capacity.

“It’s not going to be long before the economy is running at full pelt again.”

Investors are certain Stevens will raise rates at least another quarter point next month as consumer confidence rises and unemployment falls, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange. Chances of a half-point increase next month rose to 36 percent from 10 percent prior to Stevens’s speech and 2 percent on Oct. 14, the futures showed at 9:09 a.m. today.

Currency Rises

The Australian dollar rose to as high as 92.11 U.S. cents after yesterday’s speech, the strongest since August 2008, and traded at 92.09 cents at 9:20 a.m. in Sydney today. The two-year government bond yield jumped to 4.81 percent at 9:20 a.m. today from 4.63 percent before yesterday’s speech.

“I’ve said it consistently, interest rates will go up because they’ve been brought to emergency lows,” Prime Minister Kevin Rudd told Melbourne radio station 3AW today. “I don’t see any point whatsoever in trying to be cute with people about that.”

Stevens slashed borrowing costs by a record 4.25 percentage points between September 2008 and April to cushion the nation’s economy against the global financial crisis. His cuts included 1 percentage point reductions in October, December and February, the biggest moves since 1992.

‘Too Timid’

“If we were prepared to cut rates rapidly, to a very low level, in response to a threat but then were too timid to lessen that stimulus in a timely way when the threat had passed, we would have a bias in our monetary policy framework,” Stevens said. “Experience here and elsewhere counsels against that approach.”

“The governor has made it clear he’s keen to get rates back to normal quickly,” said RBS Group Australia Ltd. Chief Economist Kieran Davies, who is tipping a half-point increase next month. The last time Australian policy makers raised borrowing costs by that much was in February 2000.

Davies is the only one of 19 economists surveyed by Bloomberg after Stevens’s speech to tip a half point increase. Sixteen expect a quarter-point move and two predict no change.

Australia is only the second country after Israel to raise borrowing costs since the height of the global financial crisis. Israel isn’t a member of the G-20. U.S. Federal Reserve Chairman Ben S. Bernanke said last week he and his colleagues at the Fed “believe that accommodative policies will likely be warranted for an extended period.”

Other Asian central banks may follow Stevens in raising rates.

‘Tightening Wave’

“The region could be at the leading edge of the monetary tightening wave, though we believe the pace will be measured and modest,” Lee Heng Guie, chief economist at CIMB Investment Bank Bhd. in Kuala Lumpur, part of Malaysia’s second-largest banking group, said yesterday in a note to clients. “India and Korea will probably be the first among the Asian central banks to raise rates in the first half of 2010.”

Evidence is mounting that Australia’s economy, which skirted the global recession, is strengthening. Recent reports show consumer confidence rose this month to the highest level in more than two years, the jobless rate unexpectedly fell to 5.7 percent in September from 5.8 percent in August, the first drop in five months, and retail sales gained.

Gross domestic product rose 1 percent in the first half of this year as consumers increased spending after the government distributed more than A$20 billion ($18 billion) in cash to households. The government is spending another A$22 billion on roads, railways and schools.

“The period of greatest weakness in the Australian economy is probably past,” Stevens said yesterday. “Barring another serious international setback, the economy is likely to continue on a path of gradual expansion during 2010.”

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The Bank of Japan may decide tomorrow to start withdrawing its emergency credit-easing programs because businesses have regained access to private funding.

Governor Masaaki Shirakawa and his colleagues may say it will allow their corporate debt purchase programs to expire on Dec. 31 as scheduled. The central bank will also hold the benchmark interest rate at 0.1 percent, according to all of the 20 economists surveyed by Bloomberg News.

Shirakawa said on Oct. 3 the need for the bank’s purchases of commercial paper and corporate bonds has diminished, indicating the bank is preparing to terminate the operations. Companies surveyed in the central bank’s Tankan survey released Oct. 1 said it is becoming easier to borrow from banks as the global credit crisis eases.

“The Bank of Japan has explicitly indicated it wants to end the programs,” said Izuru Kato, chief market economist at Totan Research Co. in Tokyo. “Discontinuing them would have little impact on the economy.”

Government bonds fell, sending 10-year yields one basis point higher to 1.29 percent at 12:20 p.m. in Tokyo. The yen traded at 89.82, unchanged from late yesterday and weaker than the eight-month high of 88.01 reached on Oct. 7.

Emergency Programs

Since lowering rates to 0.1 percent in December, the bank started buying commercial paper and corporate bonds from lenders and offering them unlimited loans backed by collateral to channel funds to companies. The policy board extended the three plans to Dec. 31 when it met in July.

People with direct knowledge of the bank’s discussions said in September the bank may make a decision as soon as this month because officials are concerned that continuing the programs for too long would distort capital markets. Economists expect the bank to keep the limitless lending program.

Major companies said their access to funding improved compared with three months ago, the bank’s Tankan survey showed. Large firms said their access to credit has recovered to last year’s levels while small companies said their funding conditions were still tighter than December, the survey said.

Central banks around the world are moving to pare back unprecedented measures to unfreeze credit as the financial industry stabilizes. The Federal Reserve last month said it would shrink programs that auction loans to banks and Treasuries to bond dealers. The European Central Bank said Sept. 24 it will stop its longer-dated dollar liquidity operations because of limited demand.

Bank of England

Meanwhile the British Chambers of Commerce urged the Bank of England to expand its bond-purchase program to as much as 200 billion pounds ($315 billion). “This fragile recovery we’ve started to see really needs to be nurtured,” BCC Director General David Frost said in an interview no fax pay day loan.

The strengthening yen may dissuade the Bank of Japan from deciding tomorrow to let the programs expire, some economists say. Japan’s currency has risen more than 3 percent against the dollar in the past three months, squeezing profits of exporters and threatening the economy’s recovery from its worst postwar recession. The Nikkei 225 Stock Average has fallen 4.2 percent since Aug. 31. It rose 0.4 percent in morning trading.

“It may be difficult for the bank to make a decision this week, given that the stability in the yen and stocks is crucial for ending the corporate programs,” said Naka Matsuzawa, chief investment strategist at Nomura Securities Co. in Tokyo.

Thrown Punches

Government officials have acknowledged the lack of demand for some of the BOJ’s programs, while also calling on policy makers to mind that smaller companies still have difficulty raising funds. Deputy Prime Minister Naoto Kan said last week he hopes the bank will take into account the “severe” state of funding for smaller firms when it debates ending the programs.

“The government has already thrown preemptive punches to the Bank of Japan, but the bank should end buying commercial paper and corporate bonds as planned because the facilities aren’t really being used,” said Teizo Taya, a former BOJ board member and now adviser of the Daiwa Institute Research.

The bank will probably maintain the limitless lending program because there is demand for it, analysts say. It has lent 7.3 trillion yen ($82 billion) under the facility as of Aug. 31. In contrast, it had 100 billion yen of commercial paper on its balance sheet, about 3 percent of the amount it’s allowed itself to hold. The bank held 200 billion yen of corporate bonds, only one-fifth of the limit set by officials.

‘Big Presence’

“The lending facility has a big presence in Japan’s money market, and its end would create a rift between the central bank and the government,” said Seiji Shiraishi, chief economist at HSBC Securities in Tokyo. “The bank will probably extend the program through March 31.”

Scaling back its stimulus doesn’t mean the bank is preparing to raise interest rates, analysts surveyed said. The bank will probably keep the key rate around 0.1 percent at least through the end of 2010, 16 of 17 economists who gave forecasts through the period said.

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White House economic adviser Lawrence Summers rejected the notion that the U.S. faces an extended period of below-average growth and high unemployment in the wake of the worst recession since the 1930s.

“I would be very reluctant to accept the idea that the American economy no longer has the potential to grow rapidly,” Summers told a forum in New York yesterday organized by Bloomberg LP, the parent of Bloomberg News. “The American people have not become less capable of entrepreneurship. They have not become less dedicated to hard work, and the productive potential of this economy has not declined.”

Mohamed El-Erian, the chief executive officer of Pacific Investment Management Co., has said the U.S. is entering a “new normal” — a sustained period of annual growth of about 2 percent where credit and jobs are less plentiful. In the five years before the recession began at the end of 2007, gross domestic product expanded at an average annual rate of 2.8 percent.

Summers, 54, also repeated the administration’s commitment to a strong dollar, citing recent comments by U.S. Treasury Secretary Timothy Geithner, and he said it’s in China’s interest to reduce its dependence on exports to fuel economic growth.

“He made it very clear that our commitment is to a strong dollar based on strong fundamentals,” Summers said in reference to remarks by Geithner.

Dollar’s Decline

The dollar yesterday fell to its lowest level in almost 14 months against the currencies of six major U.S. trading partners amid signs the global economy is beginning to recover from the recession and as investors seek higher-yielding assets.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, reached 75.767 yesterday in New York, the weakest level since August 2008.

Geithner said Oct. 3 that “it is very important to the United States that we continue to have a strong dollar.” His comments came after policy makers from China to Russia called for an alternative to the world’s main currency in foreign- exchange reserves.

China, the world’s third-largest economy, has amassed a record $2.13 trillion in currency reserves, and it has used some of those reserves to purchase $800.5 billion of U.S. Treasury securities as of July.

“It’s very much in China’s interests, as its economy grows, to be less dependent on exports as the principal engine of economic growth,” Summers said guaranteed pay day loans.

‘Normal Conditions’

In the U.S., Summers said there has been a “substantial return to more normal conditions,” citing economists’ estimates that the economy returned to growth in the third quarter following a recession that began in December 2007.

“We’re looking at a very different economic situation,” he said. He added: “We’re in no position to rest, no position to declare victory.”

He called the $787 billion stimulus package approved by Congress earlier this year “a profoundly important and positive step” on the road to recovery, even as he warned about continued high unemployment.

“We’ve got a substantial period ahead of us until we get back to a fully satisfactory state for the American economy,” he said.

The jobless rate rose to 9.8 percent last month, the highest since 1983, and it is forecast by economists to reach 10 percent by the end of the year.

Payrolls Drop

Payrolls dropped by 263,000 in September, exceeding economists’ forecasts. September’s losses brought total jobs lost since the recession began to 7.2 million, the biggest decline since the Great Depression.

Obama and his advisers are considering a mix of spending programs and tax cuts beyond the stimulus measure, although Summers declined to specify which measures are under consideration.

“We’re carefully studying the experiences that have been accumulated to date,” Summers said yesterday. “There has not been a day when the president and the members of his economic team have not been thinking about strengthening the American economy.”

On the Obama administration’s push for an overhaul of financial regulations, Summers said changes are needed after major economic upheavals every three or four years, such as the collapse of hedge-fund Long Term Capital Management in 1998, and financial crises in Southeast Asia and Mexico.

As lawmakers begin debating Obama’s proposals, rejecting some of his recommendations and changing others, Summers said the administration is not “committed on any precise matter of detail,” although it wants action taken soon.

“If you don’t move quickly when the crisis is fresh in mind, you may not move at all,” he said.

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