“The dollar rose to its strongest level in almost three weeks against the euro on speculation U.S. policy makers will struggle to reach agreement on raising the nation’s debt limit, underpinning demand for the safest assets.
Japan’s yen appreciated at least 0.3 percent against all its 16 major counterparts amid concern the U.S. Treasury will exhaust what it called “extraordinary” measures to keep funding the government by late February or early March after the nation hit its $16.4 trillion debt ceiling on Dec. 31. The dollar rose the most versus the higher-yielding South African rand after the International Monetary Fund said yesterday the U.S. ought to raise the debt ceiling “expeditiously.”
“All the way through the first few months of the year it will be fiscal policy and monetary policy which are at the forefront of people’s minds,” said Paul Robson, a senior currency strategist at Royal Bank of Scotland Group Plc in London. “There was a risk of some pullback” after the dollar initially weakened yesterday, he said.
The dollar advanced 0.7 percent to $1.3089 per euro at 7:21 a.m. New York time and reached $1.3082, the strongest level since Dec. 14. The yen rose 1.3 percent to 113.71 per euro. Japan’s currency gained 0.5 percent to 86.87 per dollar after depreciating to 87.36, the weakest since July 2010.
The U.S. currency will strengthen to $1.19 per euro by year-end, Robson said. That compares with a median estimate of $1.27, based on analyst forecasts compiled by Bloomberg….”
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