By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — The U.S. dollar rose Monday, flexing its muscles at the expense of the Japanese yen and the Australian dollar, as the Federal Reserve reportedly works on a plan on how to taper economic stimulus.
The ICE dollar index DXY +0.02% , which measures the U.S. dollar’s moves against six other major currencies, rose to 83.186, up from 83.132 late Friday in North America.
The WSJ Dollar Index XX:BUXX +0.04% , an alternative gauge of the greenback’s moves against a slightly wider basket, was at 74.71, rising from 74.65.
The Aussie AUDUSD -0.06% traded at its lowest level against the U.S. dollar in about a year, buying 99.80 U.S. cents, slipping back below parity . Late Friday, it traded at $1.0026 after briefly falling below the $1 level.
The Aussie on Monday bought $1.0006 just before data from China showed some improvement from March’s results, though industrial production and fixed-asset investment results missed expectations.
The Aussie can be sensitive to Chinese data as China is Australia’s biggest export market.
Against the Japan’s currency, the greenback USDJPY -0.24% fetched ¥101.64 after the China data. It had earlier been up as high as ¥102.15, according to FactSet data, up from ¥101.51 on Friday.
“The last few sessions of U.S. dollar strength likely indicates the market is anticipating the Federal Reserve will soon provide further details on how and when it will wind back current stimulus measures,” Rivkin global analyst Tim Radford told clients late Sunday.
A exit by the Fed of its bond-buying program would make the U.S. dollar more attractive in terms of yield, analysts have said.
The Wall Street Journal reported Friday that officials at the U.S. central bank have mapped out a strategy for winding down its $85 billion-a-month bond-buying program. Officials are trying to clarify the strategy so markets don’t overreact about their next moves, according to the report.
Later Monday investors will look for the U.S. Commerce Department’s report on retail sales for April. Economists polled by MarketWatch expect a monthly drop of 0.6%, led by lower gasoline and motor-vehicle sales, compared with a 0.4% decline in March.
The dollar last week crossed above the ¥100 mark for the first time since April 2009. The market watched the dollar climb toward that mark after Japan’s central bank in early April unveiled a massive stimulus program, but until Thursday, the greenback kept running into resistance.
Also late last week, the Aussie traded above $1.02 level after a better-than-expected Australian jobs report for April, but it eventually succumbed to dollar strength.
The euro EURUSD +0.10% fetched $1.2980, slightly weaker than Friday’s level of $1.2985, and the British pound GBPUSD +0.14% changed hands at $1.5360, turning higher from $1.5357.
