Dollar Index Reaches July 2010 High on Speculation Fed to Taper The Dollar Index rose to its highest in three years before Federal Reserve Chairman Ben S. Bernanke speaks this week amid speculation signs of sustainable economic growth will encourage the central bank to slow stimulus. The greenback touched a five-week high versus the yen ahead of minutes of the Fed’s June 18-19 meeting where Bernanke said policy makers may begin slowing bond purchases this year. Data last week showed employers added more jobs than economists estimated. The euro held a two-day decline before European Central Bank President Mario Draghi speaks in Brussels today and Germany releases data on industrial production. “The payrolls number was an unequivocally good number and definitely good news for the U.S. dollar,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. (WBC) in Sydney. “For a Fed that was clearly inclined to begin tapering purchases from the September meeting, it only reinforces that view.” The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback versus currencies of six major U.S. trade partners including the euro and yen, touched 84.55, the highest since July 2010, before trading at 84.52 at 8:07 a.m. in Tokyo, little changed from its close in New York on July 5, when it jumped 1.5 percent. The U.S. dollar gained 0.2 percent to 101.39 yen after earlier touching 101.47, the highest since May 30. The euro was little changed at $1.2828, after having declined 1.4 percent in the previous two sessions. The U.S. Labor Department reported on July 5 payrolls increased 195,000 for a second straight month. A Bloomberg News survey forecast a 165,000 gain after a previously reported 175,000 rise in May. The jobless rate stayed at 7.6 percent. Bernanke said June 19 the central bank may reduce its bond buying this year and end it in mid-2014 if growth meets policy makers’ estimates. Minutes of the Fed’s meeting last month are due on July 10.
Posted on: Mon, 08 Jul 2013 00:16:09 +0000
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