The dollar rose today to a 13-month high versus the euro on expectations that a government report tomorrow will show factory orders climbing...
The dollar rose today to a 13-month high versus the euro on expectations that a government report tomorrow will show factory orders climbing the most in 14 months, reinforcing the Federal Reserve’s decision to keep raising interest rates.
The U.S. currency also climbed to a more than 10-month peak against the Japanese yen after reports Friday showed manufacturing and consumer confidence had exceeded expectations.
The dollar has risen in 2005 as the Fed lifted rates nine times in the past year — most recently last week — in contrast with central banks in Europe and Japan.
“The dollar just looks much better than anything else,” said Lawrie Dryden, head of currency and asset allocation in Sydney, Australia, at State Street Global Advisors, which manages about $32 billion.
Most Read Stories
- Calling their bluff: A Seattle doctor pegs what the GOP health bill is really about | Danny Westneat
- Investigators’ task to find out why U.S. destroyer failed to dodge cargo ship
- Police investigate officer who shot Charleena Lyles after he left Taser in locker
- Mike Hopkins beats out former team to secure Hameir Wright for UW men's basketball
- Kent police fatally shoot man after car chase
“The U.S. economy looks good, and rates are going to keep going up. The yield advantage favors the dollar.”
Against the euro, the dollar rose as high as $1.1905, the strongest since May 20, 2004, and was at $1.1903 in midday trading in Tokyo, according to currency-dealing system EBS. It may rise to $1.15 per euro in the next few months, Dryden said.
The dollar also was at 111.65 yen, having traded as high as 111.88, the strongest since Aug. 13.
U.S. factory orders jumped 3 percent in May after a 0.9 percent gain in April, based on the median estimate of 53 economists surveyed.
“It’s not going to be a straight line up for the dollar,” said Robert Rennie, a currency strategist in Sydney at Westpac Banking.
“No one wants to be the last guy buying it. This move is going to be fraught with periods of retracement.”
The U.S. currency may also get a boost on speculation a government report Friday will show job creation more than doubled in June.
“The U.S. data have been better than expected,” said Daisuke Uno, chief market analyst in Tokyo at Sumitomo Mitsui Banking