The dollar had its sixth weekly gain in seven against the yen as signs the US economic recovery is boosting corporate profits lured some investors to the stock market.
The dollar also had its third weekly advance in four against the euro as the Standard & Poor's 500 Index rallied 14 percent in the past seven days from a five-year low.
"The US will show itself to be the best place to invest," said Jeremy Fand, a currency strategist at Friedberg Mercantile Group, which manages US$800 million in assets. "The dollar's going to get stronger."
This week the dollar rose 1.2 percent to Japanese yen 125.51 at 4:36pm in New York and reached its strongest level since June 13. It strengthened 1.6 percent against the euro, for its biggest weekly advance since August, to US$0.9718 per euro.
Fand forecasts increases in US consumer confidence and spending will extend the rally in stocks and drive the dollar to 92 cents per euro in the next three to six months. The dollar has traded in the same direction as the S&P 500 index 90 percent of the time this year.
Optimism built that companies are benefiting from the US economic expansion as two-thirds of the S&P 500 companies that reported results through yesterday beat analysts' profit projections. Economists in a Bloomberg News survey forecast the economy grew 3.6 percent in the third quarter, up from a 1.3 percent pace in the second.
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