“The dollar climbed to the highest in almost a month against the yen as signs of improvement in the U.S. economy buoyed speculation the Federal Reserve will start scaling back asset purchases this year.
The greenback approached the strongest level in almost a month versus the euro before a report economists said will show factory orders gained by the most in three months. Data this week is forecast to indicate a drop in the unemployment rate as companies in the world’s biggest economy continued to add jobs. Australia’s dollar weakened as the Reserve Bankflagged declines in the currency after keeping borrowing costs unchanged at a meeting today.
“The dollar is likely to stay underpinned if data continues to improve,” said Roberto Mialich, a senior currency strategist at UniCredit SpA (UCG) in Milan. “We see scope for the Fed to be able to start tapering the policy accommodation this year before Fed Chairman Bernanke departs early next year.”
The dollar was little changed at 99.67 yen as of 9:07 a.m. in London after reaching 99.91 yen, the most since June 5. The U.S. currency was at $1.3058 per euro. It touched $1.2985 on June 26, the strongest level since June 3. Europe’s shared currency was little changed at 130.17 yen after climbing to 130.64, the highest since June 11. The Australian dollar dropped 0.5 percent to 91.92 U.S. cents.
The U.S. Commerce Department will say orders placed with factories climbed 2 percent in May following a 1 percent gain in the previous month, according to the median estimate of economists surveyed by Bloomberg News. If confirmed, that would be the biggest advance since February.