Dollar Is 0.2% From 2-Year High on Policy Divergence Bets
The dollar was about 0.2 percent from a two-year high versus the euro as U.S. job gains highlighted the divergence in monetary policy between the Federal Reserve and the European Central Bank.
The euro weakened versus higher-yielding currencies as German data showed factory orders declined the most since 2009 in August. The yen strengthened from near its weakest since 2008 even as hedge funds and other speculators increased bearish bets on the currency to the most in almost nine months ahead of the Bank of Japan’s policy decision tomorrow.
“Currency markets are quite adamant the U.S. economy has achieved escape velocity, and U.S. dollars are broadly in demand,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland.
The dollar was little changed at $1.2524 per euro as of 7:26 a.m. London time after touching $1.2501 on Oct. 3, the strongest level since August 2012. The 18-member common currency was at 137.20 yen. The Japanese currency gained 0.2 percent to 109.52 per dollar after reaching 110.09 on Oct. 1, the weakest since August 2008.
German factory orders, adjusted for seasonal swings and inflation, fell 5.7 percent in August, after climbing a revised 4.9 percent in July, the Economy Ministry in Berlin said today. Analysts predicted a 2.5 percent decline, according to the median estimate in a Bloomberg News survey.
Source: bloomberg- Dollar Is 0.2% From 2-Year High on Policy Divergence Bets
