The US dollar rose against most of its major peers as US Treasury yields made the biggest jump in almost a year, inciting demand for the US currency.
The euro pared a five-day loss versus the greenback on bets that Ireland will get a bailout from its financial crisis, preventing contagion across the region’s debt markets. The yen fell for a third straight week against its US counterpart, the longest losing streak this year. The US economy grew at a 2.4 percent annual rate last quarter, data next week may show.
“Yields have been very, very helpful in lifting sentiment toward the dollar,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC in Greenwich, Connecticut. “Good economic data is going to boost the dollar, boost yields.”
The greenback gained against 10 of its 16 most-traded counterparts.
The dollar gained as a report this week showed Philadelphia-area manufacturing expanded. The Philadelphia Fed’s general economic index climbed to a reading of 22.5, more than four times the forecast in a Bloomberg News survey.
IntercontinentalExchange Inc’s Dollar Index, used to track the currency against those of six major US trading partners, rose for a second week in the first back-to-back weekly increase since August. It advanced 0.5 percent to 78.504 in New York.
The dollar climbed 1.2 percent to ¥83.55 on Friday, from ¥82.53 on Nov. 12, and reached ¥83.79 yen on Thursday, the highest level since Oct. 5.
The greenback rose 0.1 percent to US$1.3673 per euro, from US$1.3691 on Nov. 12. The euro gained 1.1 percent to ¥114.23, from ¥113.02 the week before.
The pound fell versus the euro for the first week in a month as prospects for a bailout of Ireland and speculation that the nation’s debt crisis will hurt British banks reduced demand for the UK currency as a haven.
Sterling also posted a weekly decline versus the dollar. The pound had risen 4.7 percent against the shared currency from Oct. 25 to Monday.
The pound weakened to £0.8551 per euro as of 4:30pm in London on Friday, a weekly decline of 0.6 percent. Sterling lost 1 percent versus the dollar to US$1.5950.
The currencies of commodity exporting countries including New Zealand, Mexico, Brazil and Australia rose against most of their major counterparts as prospects for Europe’s sovereign-debt turmoil to ease fueled investors’ appetite for risk.
ASIAN CURRENCIES
Asian exchange rates dropped this week on concern governments will impose controls to curb capital inflows. South Korea’s finance ministry said on Thursday it backs legislation for a tax on bonds.
South Korea’s currency appreciated 0.1 percent to 1,133.65 won per US dollar in Seoul, reducing its decline this week to 0.5 percent, according to data compiled by Bloomberg. Malaysia’s ringgit rose 0.2 percent to RM3.1174, paring the drop in the past five days to 0.2 percent. The Thai baht was little changed at 29.94 baht and was down 0.6 percent for the week.
Seoul will back legislation reinstating a 14 percent tax on interest income from treasury and central bank bonds and a 20 percent capital gains levy on their sale, the finance ministry said on Thursday.
Taiwan’s currency strengthened after the economy expanded more than forecast in the third quarter. The currency climbed 0.2 percent to NT$30.673, taking the week’s gain to 0.3 percent.
GDP rose 9.8 percent in the third quarter from a year earlier, the government reported after the close of trading on Friday.
“Taiwan’s economy is in very good shape and it will continue to attract hot money,” said Juan Hao-yun, a Taipei currency trader at King’s Town Bank (京城銀行). “This puts more pressure on the central bank to stem gains in the currency.”
The NT dollar has appreciated 5.5 percent this year as data show overseas funds bought US$6.3 billion more Taiwanese stocks than they sold during the period.
Elsewhere, the Philippine peso dropped 0.2 percent to 43.81 pesos. Indonesia’s rupiah lost 0.1 percent to Rp8,933 and the Indian rupee declined 0.9 percent to Rs45.19.
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