The dollar traded near an eight-week low against the yen amid speculation the U.S. Federal Reserve will print more cash to boost purchases of assets as it seeks to counter the global slump.

The U.S. currency weakened most against the Taiwan and Canadian dollars after the Fed projected a deeper recession in 2009. New Zealand’s dollar rose for a fourth day after a government report showed immigration growth accelerated. The euro traded near a four-month high against the dollar after a German manufacturing and services survey beat economists’ forecasts.

“The Fed may expand its asset-purchase program, which would increase the supply of greenbacks,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “This could undermine the value of the dollar and spur investors in the U.S. to put their funds overseas.”

The U.S. currency traded at 94.81 yen as of 8:38 a.m. in London from 94.88 yesterday in New York. It fell to 94.29 earlier, the lowest level since March 20. Japan’s currency strengthened to 130.62 per euro from 130.77. The euro was little changed at $1.3777 from $1.3780 yesterday, when it reached $1.3830, the strongest level since Jan. 5.  Read the rest of this entry »