By Michael Kitchen, MarketWatch
FRANKFURT (MarketWatch) — The dollar regained some lost ground versus most major rivals Monday, extending gains modestly after data showed durable-goods orders jumped more than expected in December.
The ICE dollar index DXY +0.05% , which tracks the U.S. unit against six major rivals, edged up to 79.842 in early morning U.S. action, up from late Friday’s 79.762.
The WSJ Dollar Index XX:BUXX +0.06% , which measures the greenback against a slightly larger basket of currencies, rose to 71.16 from 71.00 late Friday.
Orders for big-ticket U.S. goods jumped 4.6% in December, boosted by a large bunch of orders for Boeing Co. BA -0.62% aircraft. Economists had forecast a 2.3% rise. Stripping out the volatile transportation sector orders rose by a still solid 1.3%. See: U.S. durable-goods orders surge 4.6% in December .
The dollar lost ground versus most major rivals other than the Japanese yen last week, with safe-haven flows eroded as global equities rallied and Wall Street’s S&P 500 Index SPX -0.17% ended at its highest level since 2007.
“Last week it seemed that Japan and Europe were the focus. This week, the U.S. should be the focus given the Fed meeting and key GDP and payroll data,” said Steven Barrow, currency and fixed-income strategist at Standard Bank.
“This comes against the backdrop of an upward drift in U.S. bond yields, possibly brought about more by positive sentiment towards ’normalization’ in euro zone financial markets than U.S. events. We suspect that the Fed meeting and U.S. data will bring a bit of balance back and U.S. yields won’t shoot higher,” he said.
An estimate of fourth-quarter U.S. growth is due on Wednesday, the same day the Federal Reserve’s rate-setting Federal Open Market Committee concludes its first policy meeting of 2013. Friday brings the all-important January nonfarm payrolls figures and other U.S. employment data.
Meanwhile, the yen traded lower Monday, with the dollar USDJPY -0.3447% hitting ¥91.13, according to FactSet, its highest mark since June 2010, before pulling back later in the day to trade at ¥90.99, still above late Friday’s ¥90.94.
The euro EURJPY -0.3399% also rose against its Japanese rival to buy ¥122.55, up modestly from ¥122.36 at the end of last week.
The yen’s latest in a string of losses came as Japanese Finance Minister Taro Aso rebutted foreign criticism that Tokyo was manipulating its currency lower to benefit Japan’s exporters.
Aso said the yen’s fall in recent months was merely a side effect of his country’s fight against the deflation that has long plagued the Japanese economy, according to reports from the region.
“We didn’t say anything when the dollar and the euro were being pushed lower. It is unreasonable to complain just because [the dollar] rose back by a mere 10 or 20 yen,” Aso said, according to a Dow Jones Newswires translation of his remarks.
The finance minister’s comments came amid growing talk of international tensions over what some see as competitive currency devaluations among the major economies.
“The issue of ‘currency war’ is once again doing the rounds in the wake of Japan’s more aggressive stance on the [yen], leading to growing friction in currency markets,” said Mitul Kotecha, currency strategist at Crédit Agricole.
Also Monday, Kyodo News reported Japanese Prime Minister Shinzo Abe and U.S. President Barack Obama were close to completing plans for a summit on Feb. 21 or 22. The report didn’t mention the yen as a possible agenda item, however.
Among other major currency pairs, the euro EURUSD -0.0204% changed hands for $1.3469, up from Friday’s $1.3454.
The European currency had struck an 11-month high of $1.3480 at the end of last week as banks prepared to repay a larger-than-expected amount of special loans provided by the European Central Bank. Read: Euro hits 11-month high on LTRO paybacks.
Also Monday, the British pound GBPUSD -0.2907% moved lower to $1.5736, from Friday’s $1.5804, while the Australian dollar AUDUSD -0.2224% fell to $1.0398 from $1.0421.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
