The dollar rose for a seventh day against the yen, the longest winning streak since October, before US economic data this week that may add to speculation the economy is strong enough to handle higher interest rates.
A gauge of the greenback jumped 1.3 per cent last week after some Federal Reserve officials said they would consider raising rates at the next meeting in April.
The yen weakened versus all of its 16 major peers Monday as gains in Japanese shares and US stock futures reduced demand for haven assets. “Expectations for solid US economic data this week are lifting the dollar,” said Koji Fukaya, chief executive officer at FPG Securities Co. in Tokyo.
“It’s hard to find a reason to sell dollars. Concerns over the US economy, China, oil, which had fuelled risk aversion, are subsiding to underpin the dollar and weigh on the yen.”
The dollar climbed 0.4 per cent to 113.53 yen as of 6.52am in New York on Monday, extending its advance in the past seven days to 1.9 per cent. The US currency was little changed at $1.1169 per euro. The yen weakened 0.4 per cent to 126.76 per euro.
Financial markets including those of the UK, Germany, Australia, and New Zealand are shut Monday for the Easter holiday. Trading will take place as normal in the US.
US employers added 208,000 workers in March, after hiring 242,000 the previous month, according to a Bloomberg survey before the Labour Department releases the figure on April 1st.
“The dollar will be highly sensitive to US data this week ahead of payrolls,” Takeru Kurokawa, an analyst in Tokyo at Ueda Harlow, which provides margin-trading services, wrote in a note to clients.
“The dollar is prone to react more to positive US economic news.” Speculators and hedge funds trimmed bets for a third week that the US currency will strengthen against eight of its major peers, according to data from the Commodity Futures Trading Commission.
Fed Bank of San Francisco President John Williams, who doesn't vote on monetary policy this year, said on Monday that the global economy, particularly China and Brazil, was having a significant impact on measures that US policy makers watch to determine interest rates.
On March 23rd, Fed Bank of St. Louis President James Bullard said US policy makers should consider raising rates in April.
Fed Bank of Philadelphia President Patrick Harker said last week the US economy is resilient, and he’d support a quarter-point increase if that continues.
“It’s all about Fed expectations, “Jason Schenker, president and chief economist of Prestige Economics LLC, said in an interview on Bloomberg Television.
“The fact that they did not move in March, but now it looks like they could move in April, that’s going to be what everyone is watching for this week. And that does have the potential to keep the dollar not only supported, but to send it higher in the week ahead.”
