Sun, Mar 10, 2013 - Page 15 News List

US Dollar Index posts gains for fifth straight week

Bloomberg

The US Dollar Index gained for a fifth straight week, its longest rally since June, as employers added more jobs last month than forecast, signaling better economic prospects for the US compared with other developed nations.

The index, Intercontinental Exchange Inc’s benchmark that tracks the greenback against the currencies of six major US trading partners, reached its highest level since Aug. 3. It added 0.5 percent to 82.715. The weekly gains streak was the longest since the five days ended June 1.

The euro touched its lowest level versus the greenback since December last year as European Central Bank policymakers said the region’s economy may shrink more than estimated and reduced their inflation forecast. The yen fell to the weakest level versus the dollar since 2009 as a report showed Japan’s current account deficit widened and the incoming central bank governor endorsed buying longer-maturity bonds. A report on Friday may show US consumer prices rose at a faster pace last month.

The US dollar rose 2.6 percent this week to ¥96 in New York, touching the highest level since Aug. 12, 2009. It gained 0.1 percent to US$1.3005 per euro, the fifth straight advance. The 17-nation currency appreciated 2.5 percent to ¥124.86.

The yen weakened on Friday as the Japanese Ministry of Finance said the deficit in the current account, the widest measure of trade, increased to ¥364.8 billion (US$3.8 billion) in January, up from ¥264.1 billion a month ago.

Japan’s currency has slumped 9.6 percent versus the US dollar this year as Japanese Prime Minister Shinzo Abe pushed the central bank to add to stimulus to beat deflation. Haruhiko Kuroda, Abe’s pick to become the next Bank of Japan (BOJ) governor, told lawmakers this week the scale of the BOJ’s asset purchases was insufficient to achieve its target of 2 percent inflation.

The pound declined to a two-and-a-half year low versus the dollar and dropped against the euro this week amid investor concern that UK policy makers are struggling to avoid an unprecedented triple-dip recession.

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