Dollar Holds Gains Before Jobs Data as GDP Boosts Fed Taper Bets

The dollar held gains against most major peers before a U.S. jobs report today and after data yesterday showed the economy expanded more than forecast, fueling bets for an earlier taper in Federal Reserve stimulus.

The U.S. currency headed for a second weekly gain against the euro as a Bloomberg measure of U.S. economic surprises turned positive for the first time in almost a month. The euro was set for a second weekly loss versus the yen after the European Central Bank unexpectedly cut interest rates to a record yesterday. Australia’s dollar fell after the central bank reduced its growth forecast for next year.

The dollar was little changed at $1.3414 per euro as of 9:44 a.m. in Tokyo from yesterday, when it touched $1.3296, the strongest level since Sept. 16. The greenback bought 98.19 yen from 98.09. Japan’s currency traded at 131.72 per euro from 131.63 in New York, when it gained 1.3 percent.

The dollar has risen 0.5 percent against the euro this week, following a 2.3 percent rally last week. It has fallen 0.5 percent versus the yen, while Japan’s currency has gained 1 percent over the euro.

(Source: Bloomberg)

Euro Falls to 2-Week Low as Inflation Data Fuel ECB Easing Bets

The euro slid to a two-week low against the dollar and the yen as signs of economic weakness in the currency bloc fueled speculation the European Central Bank will cut interest rates.

The 17-nation currency extended its biggest drop in more than a year versus the greenback before data forecast to show manufacturing contracted in France while it expanded in the U.S. Reports yesterday showed the euro region’s inflation slowed and unemployment climbed to a record. The dollar headed for a weekly gain against most of its major peers.

The euro slid 0.3 percent to $1.3545 at 10:47 a.m. in Tokyo after reaching $1.3540, the weakest since Oct. 17. Yesterday it dropped 1.11 percent, the most since June 2012. The shared currency declined 0.4 percent to 133.10 yen and reached 133.05, the lowest since Oct. 16.

The dollar fetched 98.29 yen from 98.36, set for a 0.9 percent weekly gain. It’s up 1.9 percent versus the euro since Oct. 25.

The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, was at 1,012.41 from 1,011.72 yesterday, set for the highest close since Oct. 15. The gauge was set for a 1.2 percent climb this week.

(Source: Bloomberg)