The dollar strengthened to a seven-year high against the yen before U.S. data this week that economists say will back the case for higher interest rates as Japan and Europe ease policy.
The greenback was 0.2 percent from its strongest in two years against the euro before the European Central Bank meets tomorrow. Australia’s currency slid to a four-year low after a report showed economic growth was less than forecast. New Zealand’s dollar weakened following a drop in milk prices at an auction. Federal Reserve Vice Chairman Stanley Fischer said yesterday low oil prices are a boon to the U.S. economy.
“The market has been paying attention to comments by Fed officials that lower energy prices are a plus for the U.S. recovery,” said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank in New York. “That optimism over the economic outlook is fueling dollar buying.”
The dollar rose 0.2 percent to 119.39 yen at 11:45 a.m. in Tokyo from yesterday, after reaching 119.44, the highest since August 2007. It was at $1.2387 per euro from $1.2383 in New York. The greenback touched $1.2358 on Nov. 7, the strongest since August 2012. The euro traded at 147.88 yen from 147.63.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 trading partners, was little changed at 1,111.39 from yesterday, when it closed at the highest level since March 2009. The gauge has risen 9 percent in 2014, heading for its best year since Bloomberg started compiling the data in 2004.
Source: Bloomberg (03 Dec 2014)
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