Dollar Strengthens for Second Day Before Housing, Jobless Claims The dollar rose for a second day against the yen before U.S. data that economists said will show housing and a gauge of leading indicators improved, boosting the case for a reduction in Federal Reserve stimulus. The Bloomberg U.S. Dollar Index rose to a two-week high after Fed minutes released yesterday showed most members were “broadly comfortable” with the plan to trim stimulus this year. India’s rupee slumped to a record and Malaysia’s ringgit fell to a three-year low as the Fed decision spurred demand for the dollar. The euro advanced to a two-week high versus the yen as European manufacturing and services activity improved. “The U.S. economy is slowly strengthening and tapering will occur and, regardless of the timing, both of those lend support to the U.S. dollar,” said Hans Kunnen, a senior economist at St. George Bank Ltd. in Sydney. The dollar rose 0.7 percent to 98.32 yen at 9:07 a.m. in London after advancing to 98.41, the strongest level since Aug. 15. The U.S. currency was little changed at $1.3360 per euro. The euro climbed 0.8 percent to 131.46 yen after reaching 131.47 yen, the highest since Aug. 5. The U.S. Federal Housing Finance Agency will say its house price index climbed 0.6 percent in June after rising 0.7 percent the previous month, according to a Bloomberg News survey. The Conference Board’s gauge of the outlook for the next three to six months climbed 0.5 percent in July, after being unchanged a month earlier, according to a separate Bloomberg survey. “Almost all participants confirmed that they were broadly comfortable” with the Federal Open Market Committee moderating “the pace of its securities purchases later this year,” according to the minutes of the central bank’s July 30-31 meeting released yesterday. The FOMC will probably reduce its monthly purchases of $85 billion in bonds at its Sept. 17-18 meeting, according to 65 percent economists in an Aug. 9-13 Bloomberg survey. The median estimate is a cut to $75 billion each month. The Bloomberg U.S. Dollar Index advanced 0.1 percent to 1,027.99 after rising to 1,029.62, the highest since Aug. 5. The dollar appreciated 5 percent this year, the best performer after the euro of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro advanced 6.5 percent, while the yen fell 8.7 percent. India’s rupee fell 1.3 percent to 64.885 per dollar after weakening to a record 65.56. The ringgit slipped 0.4 percent to 3.3080 after depreciating to 3.3228, the least since June 2010. A composite gauge of manufacturing and services activity in the euro area increased to 51.7 in August from 50.5 the previous month, according to a report from London-based Markit Economics. Readings above 50 indicate growth.
Posted on: Thu, 22 Aug 2013 08:54:11 +0000
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