BLBG:Dollar Gains Versus Major Peers on Europe, China Data
The dollar advanced as reports showed euro-area services and manufacturing output contracted in September and China’s services industry expanded the least in more than a year, boosting demand for the greenback as a haven.
The U.S. currency climbed against all of its 16 major peers tracked by Bloomberg before data that economists forecast will show U.S. employers added fewer workers last month. The European Central Bank and the Bank of England hold policy meetings tomorrow. Australia’s dollar slid to the least in almost a month after the nation recorded its widest trade deficit since 2008. The yen held a three-day slide against the dollar.
“The continual paucity of the economic data feeds the market’s risk off idea and dollar strength against most currencies,” said Steven Barrow, head of G-10 research at Standard Bank Plc in London.
The dollar rose 0.1 percent to $1.2914 per euro at 7:38 a.m. New York time. It added 0.2 percent to 78.28 yen after touching 78.31, the strongest level since Sept. 21. The 17- nation currency was little changed at 101.08 yen.
The Dollar Index, which tracks the U.S. currency against those of six major trading partners, rose 0.1 percent to 79.83, snapping a two-day decline.
A composite index based on a survey of services and manufacturing purchasing managers fell to 46.1 from 46.3 in August, London-based Markit Economics said today. That’s above an initial estimate of 45.9 published on Sept. 20. A reading below 50 indicates contraction.
ECB Meeting
Figures in the U.S. today from the ADP Employer Services may show private employers hired 140,000 workers in September after 201,000 the prior month, according to the median estimate in a Bloomberg survey.
ECB officials meet tomorrow in Ljubljana, Slovenia, with policy makers expected to keep the bank’s benchmark interest rate unchanged at a record-low 0.75 percent, according to a Bloomberg survey of economists.
The euro held its gains even after Spanish Prime Minister Mariano Rajoy yesterday denied immediate plans to ask for a bailout in response to mounting speculation that a request was imminent.
The euro has strengthened 1.6 percent in the past month, according to Bloomberg Correlation Weighted Indexes. The dollar declined 1.2 percent and the yen slid 1.2 percent.
Aussie Falls
Australia’s dollar sank today after data showed the nation’s trade deficit for August was almost three times wider than the median forecast of economists. Imports exceeded exports by A$2.03 billion ($2.07 billion) in August, compared with a revised A$1.53 billion shortfall in July.
In China, data today showed non-manufacturing industries grew at the weakest pace since at least March 2011, fanning speculation the Reserve Bank of Australia will lower interest rates again following a quarter-point reduction yesterday. China is Australia’s biggest trading partner.
“The Reserve Bank will cut again probably next month,” said Joseph Capurso, a strategist at Commonwealth Bank of Australia (CBA) in Sydney. “I don’t think the RBA will cut as much as the market is expecting, but those expectations have been one thing that has pushed the Aussie down.”
The so-called Aussie dropped as much as 0.7 percent to $1.0198, the weakest level since Sept. 6.
BOJ Decision
The yen held a three-day fall against the dollar, the longest runs of declines since Aug. 17, before the Bank of Japan (8301) begins its policy meeting tomorrow. Officials expanded the Japanese central bank’s asset-purchase program last month in a bid to stimulate economic growth.
Japan’s new Economy Minister Seiji Maehara this week pledged a closer watch over the BOJ to ensure it meets its 1 percent inflation goal, adding that purchases of foreign bonds may be a powerful tool for easing.
The dollar may climb toward its highs in August and September versus the yen, MacNeil Curry, New York-based chief rates and currencies technical strategist at Bank of America Corp. wrote in a report yesterday.
A break above resistance at 78.18 to 78.24 “reinvigorates the uptrend” for dollar-yen, Curry wrote. Resistance is a level where orders to sell may be clustered. The greenback peaked at 79.66 yen on Aug. 20 and rose to as high as 79.22 on Sept. 19, according to data compiled by Bloomberg.
To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net.
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net.
