The dollar advanced for a second day against the yen as a report before the U.S. government’s payroll figures later this week showed factory orders unexpectedly increased in November. Sterling climbed against all of its major counterparts as U.K. manufacturing expanded at the fastest pace in 16 years. Canada’s dollar slid from close to its strongest level in 2 1/2 years versus the greenback as crude oil fell. Chile’s peso declined the most in two years as the central bank said it planned to buy $12 billion to weaken its currency. “The data is positive for the dollar, which is going to trade data release by data release,” said Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut. “Dollar-yen seems to be reacting positively to data the last couple of days.” The greenback gained 0.5 percent to 82.18 yen at 10:13 a.m. in New York, from 81.74 yesterday, when the U.S. currency rose 0.8 percent, the most since Dec. 7, ending a 10-day slump. The dollar traded at $1.3352 per euro, compared with $1.3361. The yen slid 0.5 percent to 109.71 per euro after touching 110.24, the weakest level since Dec. 21. Orders for U.S. manufacturers’ goods gained 0.7 percent in November after a revised 0.7 percent slide in the previous month, the Commerce Department reported today in Washington. The median forecast of 53 economists in a Bloomberg News survey was for a decrease of 0.1 percent. Labor Markets U.S. employment probably rose for a third month in December, bringing payroll growth last year to about 1 million and pointing to further improvement in the labor market this year, economists said before a report Jan. 7. Canadian employers added 20,000 jobs in December, according to a Bloomberg survey before a report from Statistics Canada on the same day. “We’re expecting another pretty solid job gain,” said Blake Jespersen, director of foreign exchange in Toronto at Bank of Montreal. “Markets are fairy upbeat, and with the market returning to full force today we’ll see better liquidity and a bit more room for Canada to make some gains here.” Canada’s dollar declined 0.4 percent to 99.77 Canadian cents per U.S. dollar, from 99.38 yesterday, when it touched 98.89 cents, the strongest level since May 2008. Crude for February delivery fell to $91.46 a barrel on the New York Mercantile Exchange. Yesterday, the contract rose as high as $92.58, the highest intraday price since Oct. 7, 2008. Futures gained 15 percent last year. Stronger Pound The pound advanced as a gauge of U.K. manufacturing growth rose to 58.3 last month from a revised 57.5 in November, the most since September 1994, according to Markit Economics and the Chartered Institute of Purchasing and Supply. U.K. mortgage approvals unexpectedly increased in November. Lenders granted 48,019 loans to buy homes, compared with 47,315 in October, the Bank of England said today. Sterling rose 0.7 percent to $1.5592 and appreciated 0.7 percent to 85.67 pence per euro. The Australian dollar dropped after yesterday’s slump against its U.S. counterpart on concern flooding in the state of Queensland will slow economic growth. Record rainfall has caused floods to spread across an area the size of France and Germany, destroying cotton crops, halting coal deliveries, shutting mines and prompting BHP Billiton Ltd. and Rio Tinto Group to invoke a legal clause allowing them to miss contracted deliveries. Weaker Aussie The Australian currency has declined 1.7 percent over the past week according to Bloomberg Correlation-Weighted Currency Indexes, which track a basket of 10 developed-country currencies. The Aussie slid 0.8 percent to $1.0087. The euro rose against the dollar and yen as European inflation accelerated more than economists estimated in December to the fastest rate in more than two years, led by surging energy prices. Euro-area consumer prices rose 2.2 percent in December from a year earlier after increasing 1.9 percent in the previous month, the European Union statistics office in Luxembourg said today. That’s the highest inflation rate since October 2008 and above the 2 percent forecast by economists, according to the median estimates in a Bloomberg News survey. Chile’s peso fell the most since October 2008 after the central bank’s President Jose De Gregorio announced a plan yesterday to buy $50 million a day in the foreign-exchange market from Jan. 5 until Feb. 9. The peso depreciated as much as 4.9 percent to 489.75 per U.S. dollar. Chile’s currency gained 17 percent in the second half of 2010, trailing only the Aussie among currencies tracked by Bloomberg. Surging copper prices boosted trade prospects for the world’s biggest producer of the metal. To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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