BS: Dollar Trades Near Week High Before U.S. Data on Jobs, Services
Jan. 5 (Bloomberg) -- The dollar traded near a one-week high against the yen before U.S. reports on jobs and services industries that may add to evidence a recovery in the world’s largest economy is building momentum.
The U.S. currency strengthened versus 12 of its 16 major counterparts after a report yesterday showed American factories received more orders in November. The euro fell for a third day versus the dollar amid concern the region’s sovereign debt crisis will persist.
“A string of upbeat economic news is bolstering optimism about the U.S. recovery,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “This is contributing to a firmer dollar.”
The greenback traded at 81.99 yen at 9:39 a.m. in Tokyo from 82.04 yen in New York yesterday, when it touched 82.28 yen, the highest level since Dec. 29. The currency rose to $1.3284 per euro from $1.3308. The euro fell to 109.25 yen from 109.17 yesterday, when it reached 110.24, the strongest since Dec. 21.
The Dollar Index gained for a second day yesterday after the Commerce Department said that orders for U.S. manufacturers’ goods gained 0.7 percent in November after a revised 0.7 percent slide in the previous month. The median forecast of 53 economists in a Bloomberg News survey was for a decline.
U.S. Reports
U.S. employment rose by 100,000 in December, the most since November 2007, according to a Bloomberg survey of economists before the ADP Employer Services report today. The Institute for Supply Management’s non-manufacturing index, which covers about 90 percent of the economy, rose to 55.7 in December, the highest since May 2006, another survey showed before today’s data. A reading higher than 50 signals growth.
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro and the yen, rose 0.4 percent yesterday. Europe’s currency fell for a third day versus the yen before Portugal sells six- month bills today, the first of Europe’s high-deficit nations to test investor demand this year after the threat of default forced Greece and Ireland to seek bailouts last year.
“Europe’s sovereign debt woes are still likely to continue this year,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “The bias is for the euro to be sold.”
The government debt agency, known as IGCP, plans to auction 500 million euros ($665 million) of bills repayable in July. Portugal sold six-month bills on Sept. 1 at an average yield of 2.045 percent, with investors bidding for 2.4 times the amount of securities offered. A year ago, the country paid just 0.592 percent to borrow for six months.
--Editors: Jonathan Annells, Rocky Swift.
To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
