BLBG: Dollar Advances for Third Day Against Yen Before Federal Reserve Decision
The dollar strengthened for a third day against the yen amid speculation the Federal Reserve will restart purchases of bonds today to spur the U.S. economy.
The Japanese currency tumbled against all 16 of its most- traded counterparts. It weakened from near the strongest level in 15 years against the greenback after a private-sector report showed U.S. companies boosted payrolls more than forecast last month. The Fed may pledge to buy $500 billion or more in securities under a policy called quantitative easing, according to 29 of 56 economists surveyed by Bloomberg News.
“It appears that everyone has come to the conclusion that the Fed is going initiate QE; it’s going to be relatively modest but it will be supportive of risk and supportive of further global expansion,” said Boris Schlossberg, director of research at online currency trader GFT Forex in New York. “If the Fed commits to an upside surprise like $1 trillion right off the bat, it will drag dollar-yen down through 80 past all time lows.”
The dollar rose 0.7 percent to 81.17 yen at 9:24 a.m., from 80.63 yesterday. It reached 80.22 on Nov. 1, the weakest level since April 1995. The greenback rose 0.1 percent to 1.4017 per euro at 8:33 a.m. in New York, from $1.4034 yesterday, when it depreciated to $1.4058, the weakest level since Oct. 25. The yen traded at 113.72 per euro, down 0.5 percent from 113.15 yesterday.
The greenback erased an earlier loss versus the euro after ADP Employer Services reported employment increased by 43,000 in October. The median estimate of 38 economists surveyed by Bloomberg News called for a 20,000 gain.
To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net; Lukanyo Mnyanda in London at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
