Tuesday, 25 June 2013

Dollar Index Holds Four-Day Gain on Stocks Decline



The Dollar Index held a four-day gain amid declines in Asian stocks and prospects for the Federal Reserve to pare back bond buying as the economy strengthens.
The greenback was 0.8 percent from a two-week high versus the yen before U.S. reports that economists said will show house prices increased and durable-goods orders gained. Volatility in the Australian dollar was near the highest in 1 1/2 years amid concern a cash crunch in China will curb economic growth in the South Pacific nation’s biggest export market.
“The dollar is starting to really find momentum as the economy starts to point to the end of quantitative easing,” said Andrew May, a sales trader at CMC Markets in Auckland. Traders “are getting out of stocks, coming out of risk and commodities, so there’s going to be that resurgence back into the U.S. dollar.”
The Dollar Index, which Intercontinental Exchange Inc. uses to monitor the U.S. currency against those of six trading partners, was little changed at 82.458 as of 10:29 a.m. in Tokyo from 82.425 yesterday, the highest closing level since June 5.
The U.S. currency rose 0.2 percent 97.90 per dollar after yesterday touching 98.70, the most since June 11. It was little changed at $1.3122 per euro. The yen fell 0.2 percent to 128.48 per euro from 128.22.
JPMorgan Chase & Co.’s Group of Seven Volatility Index, based on currency option premiums, rose to as high as 11.96 percent yesterday, the most since January 2012. The gauge has averaged 8.76 percent in the past year.
(Source: Bloomberg)

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