MW:Dollar climbs on most currencies, drops vs. yen
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — The U.S. dollar climbed against most currencies on Friday ahead of a slew of economic data due later in the day, but fell against the yen, shrugging off the International Monetary Fund’s backing for Japan’s monetary stimulus.
The ICE dollar index DXY +0.30% , which measures the greenback against six major global currencies, climbed to 83.089 by late Friday afternoon in Hong Kong from 83.022 in North America late on Thursday.
The advance adds to the gains recorded earlier this month, as rising U.S. Treasury yields and improving economic data increasingly drew investors to the greenback. The ICE dollar index is on track to rise more than 1.7% in May.
The WSJ dollar index XX:BUXX +0.23% , a gauge that tracks the currency against a slightly larger basket of rival units, rose to 74.87 from 74.77.
“The U.S. dollar has entered a new phase, in which better U.S. data mean stronger U.S. dollar and vice versa,” analysts at RBC Capital Markets wrote in a note to clients.
The euro EURUSD -0.39% dropped to $1.3029 from $1.3039 and the British pound GBPUSD -0.13% slipped to $1.5205 from $1.5230.
The dollar’s appreciation came ahead of the release of consumer spending and personal income figures for April, and the Chicago Purchasing Managers’ Index and consumer sentiment data for May.
But the dollar USDJPY -0.19% slipped against the Japanese currency, and was buying ÂĄ100.61, compared with ÂĄ100.73. The greenback dropped as low as ÂĄ100.47 earlier in the Asian day.
The IMF on Friday said it fully endorses the Bank of Japan’s moves to spur consumer prices to 2% inflation in the deflation-afflicted nation through “sweeping enhancements” to its monetary-policy framework.
“So long as monetary easing pursues domestic goals, and is accompanied by comprehensive fiscal and structural reforms, we don’t see the yen’s current depreciation as problematic,” the fund said.
Among other major currency pairs, the Australian dollar AUDUSD -0.67% was changing hands for 96.08 U.S. cents, from 96.59 cents. The Aussie briefly dropped below the 96-cent level during the session.
Also suffering big losses among the Group of 10 nation, or G-10, currencies, the New Zealand dollar NZDUSD -0.84% slumped to 80.31 U.S. cents from 80.89 cents.
Among emerging market currencies, the rupee fell sharply after India’s gross domestic product grew 5% in the year ended March 31, the slowest pace of expansion for the country in a decade. Fiscal fourth-quarter GDP improved 4.8%, as expected. The dollar USDINR +0.17% was buying 56.58 rupees, up from 54.38 rupees.
