BLBG: Dollar Near One-Week High After Obama Says Currency Is ‘Strong’
The dollar traded near the highest level in a week against the euro after President Barack Obama said the U.S. currency is “extraordinarily strong” because investors are confident in the economy.
The yen may decline for a fourth day versus the greenback after a Japanese government report showed the nation posted the biggest-ever decline in overseas shipments, signaling reduced demand for its goods. The euro may fall for a fifth day against the British pound, the longest losing stretch since Jan. 9, before a German report today economists say will show business confidence dropped to the lowest level in more than 26 years.
“The confidence about the U.S. economy and the dollar is gradually recovering,” said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG, Germany’s second- largest lender. “Thanks to aggressive policy steps, there is an emerging view that the U.S. economy, which had slipped into a recession first, has a better chance of pulling out of the doldrums ahead of other countries.”
The U.S. currency traded at $1.3482 per euro as of 2:07 p.m. in Tokyo from $1.3468 late in New York yesterday, when it reached $1.3431, the strongest since March 19. The greenback was little changed at 97.80 yen from 97.86 yen. The euro was at 91.85 British pence from 91.72 pence.
The yen traded at 131.80 per euro from 131.81 yesterday. The Japanese currency declined to 68.18 versus Australia’s dollar from 68.07, and weakened to 79.55 against Canada’s dollar from 79.43.
Dollar Index
The Dollar Index gained for a second day as the U.S. president said his efforts to revive the economy are starting to take hold and that his fiscal 2010 budget will build a foundation for future growth.
“I don’t believe there is the need for a global currency,” he said at a press conference at the White House in Washington.
The ICE’s Dollar Index, which tracks the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, rose 0.2 percent to 84.060 after reaching 82.63 on March 19, the lowest level since early January.
Japan’s currency may weaken after the Finance Ministry report showed the recession sapped demand for the nation’s cars and electronic goods. Exports dropped 49.4 percent in February from a year earlier, the sharpest decline since at least 1980, when the government started to keep comparable data.
The Nikkei 225 Stock Average fell 0.2 percent, while the MSCI Asia-Pacific Index of regional shares rose 0.1 percent.
Demand for the euro may weaken on speculation that the recession in Europe’s largest economy is deepening.
The Ifo institute’s German business climate index dropped to 82.2 in March from 82.6 in February, according to a Bloomberg News survey of economists. That would be the lowest level since November 1982. Ifo will release the report at 10 a.m. in Munich.
