Dollar Falls From 7-Week High on Economy; Aussie Gains

The dollar fell from a seven-week high as data showed the U.S. economy shrank for the first time in three years, increasing the case for the Federal Reserve to maintain record-low borrowing costs to stimulate growth.

The euro rose from almost a 3 1/2-month low before European Central Bank Governing Council member Carlos Costa speaks tomorrow amid speculation the central bank may expand stimulus next week. Australia’s dollar led gains among major peers on signs corporations’ capital expenditure will increase. China’s yuan ended a five-day skid as some investors judged the depreciation excessive. Declines in the dollar were limited as a separate report showed fewer Americans filed applications for unemployment benefits last week.