“The Dollar Index (DXY) approached the highest level since August before a U.S. report forecast to show payrolls increased in March, underpinning optimism the world’s biggest economy is recovering.
The yen rose against most of its major counterparts amid speculation its slide yesterday when the Bank of Japan (8301) expanded monetary stimulus was too rapid. The euro weakened after retail sales in the 17-nation area dropped in February, adding to signs the region is struggling to recover from recession. South Korea’s won fell to a seven-month low against the dollar as the risk of conflict with North Korea spurred capital outflows.
“The dollar is becoming more of a pro-cyclical currency,” said Ian Stannard, head of European currency strategy at Morgan Stanley in London. “If we get a positive surprise from U.S. payrolls we are likely to see the dollar regaining ground and it could be the catalyst for a move higher against the yen.”
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trading partners, gained 0.1 percent to 82.769 at 7:05 a.m. in New York after rising to 83.494 yesterday, the highest level since Aug. 2.
The dollar rose 0.1 percent to $1.2921 per euro after rising to $1.2746 yesterday, the strongest level since Nov. 21. The yen gained 0.1 percent to 96.27 per dollar, after slumping 3.4 percent yesterday. Japan’s currency appreciated 0.2 percent to 124.40 per euro.