Nov. 9 (Bloomberg) -- The dollar weakened to a 15-month low against the currencies of major U.S. trading partners after Group of 20 finance officials pledged to maintain stimulus measures, encouraging investors to buy higher-yielding assets.

The U.S. and Japanese currencies fell against most of their major counterparts tracked by Bloomberg as U.S. equities advanced on the G-20 stance. Canada’s dollar rose the most against the greenback since May as commodities including crude oil and gold rallied.

“The dollar retains its status as the cheap funding currency of the world,” said Paresh Upadhyaya, who helps manage $21 billion in currency assets as a senior vice president at Putnam Investments LLC in Boston. “We’ve seen the dollar sell off as risk returns.”

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, dropped 1 percent to 75.060 at 4:11 p.m. in New York, from 75.819 on Nov. 6. The gauge touched 74.930, the lowest level since August 2008. The index has lost 7.7 percent in 2009.

The Canadian dollar appreciated as much as 2 percent to C$1.0543, the strongest level since Oct. 26. It was the biggest advance since May 29.

Gold futures for December delivery surged as much as 1.5 percent to a record $1.111.70 an ounce, while crude oil rose as much as 3.6 percent to $80.19 a barrel. Raw materials account for more than half of Canada’s export revenue.

Stronger Rand

South Africa’s rand gained 1.5 percent to 7.4275 per dollar and Norway’s krone advanced 2.1 percent to 16.11 yen on bets stock and commodity gains will encourage investors to increase carry trades, in which they sell the currency of a nation with low borrowing costs and buy assets where returns are higher.

Benchmark interest rates of 0.1 percent in Japan and as low as zero in the U.S. make the yen and dollar favored targets for investors seeking to fund carry trades.

The U.S. currency was under pressure as the International Monetary Fund said in a report published Nov. 7 that the greenback may still be overvalued as traders use the currency to fund carry trades. The dollar “has moved closer to medium-run equilibrium” yet is still “on the strong side,” the IMF said.

The Standard & Poor’s 500 Index advanced 2.2 percent today after G-20 finance officials agreed over the weekend in Scotland to keep interest rates low and maintain record budget deficits until recoveries take hold.

U.S. Labor Market

America’s unemployment rate jumped in October to 10.2 percent, the highest level since 1983, the Labor Department reported on Nov. 6. Payrolls fell by 190,000, more than the median forecast of 84 economists in a Bloomberg survey.

The Federal Reserve repeated at the end of a two-day policy meeting on Nov. 4 its intent to keep interest rates “exceptionally low” for “an extended period.”

The payrolls report “is disconcerting,” said Brian Kim, a currency strategist in Stamford, Connecticut, at UBS AG, the world’s second-largest currency trader. “It raises questions whether the Fed will wait even longer.”

The dollar depreciated as much as 1.2 percent per euro, the biggest decline since Nov. 4, before trading at $1.4995, compared with $1.4847 at the end of last week. It touched $1.5020, the weakest level since Oct. 26. The euro advanced 1.1 percent to 134.96 yen, from 133.45. The dollar increased 0.2 percent to 90.03 yen, form 89.88.

Outlook for Euro

Speculators are the most bullish in almost two years on the euro, betting the eight-month, 20 percent rally won’t end until it hurts Germany, Europe’s biggest economy.

Options trading indicates a more than 60 percent chance the euro will reach $1.55 by March 31, implied volatility data tracked by Bloomberg show. Hedge fund managers and other large speculators had more than twice as many futures and options bets in September and October that the currency would rise as wagers on a decline, the most bullish ratio since November 2007, Commodity Futures Trading Commission data show.

The euro strengthened versus the dollar today as the Federal Statistics Office in Wiesbaden said that exports from Germany rose 3.8 percent in September. The median forecast of 13 economists in a Bloomberg survey was for a 2.5 percent increase.

New Zealand’s currency advanced against all of its 16 major counterparts tracked by Bloomberg as Fonterra Cooperative Group Ltd. said it will probably pay its 10,500 farmer-shareholders NZ$6.05 ($4.46) for each kilogram of milk supplied in the year to May 31. That would be the second highest since it paid a record NZ$7.90 a kilogram in the year ended May 2008.

Fonterra accounts for about 40 percent of the global trade in butter, milk powder and cheese and sells products in more than 140 countries.

New Zealand’s currency rose as much as 2.4 percent to 74.22 U.S. cents, the highest level since Oct. 28. It gained as much as 2.5 percent to 66.79 yen.

To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Oliver Biggadike in New York at obiggadike@bloomberg.net

Last Updated: November 9, 2009 16:18 EST