The dollar headed for weekly gains versus all 16 of its major peers as improvements in the U.S. economy add to the case for the Federal Reserve to slow the pace of stimulus measures that tend to debase the currency. The greenback reached the strongest level in a week versus the euro before the U.S. Labor Department releases employment data for July. The Bloomberg Dollar Index was set for its first weekly gain in a month. Australia’s dollar slid to the lowest in almost three years before an Aug. 6 Reserve Bank meeting that economists say will see interest rates cut to a record low. “The dollar will remain well bid if the jobs figures on Friday are good,� said Masato Yanagiya, the head of foreign exchange and money trading in New York at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-biggest financial group by market value. “The Fed is most likely to start to taper monetary stimulus in September.� The dollar was little changed at $1.3221 per euro at 9:20 a.m. London time after touching $1.3190, the strongest since July 25. The dollar touched 99.75 yen, the most since July 25, before trading at 99.60. The yen slid 0.2 percent to 131.70 per euro after sinking 1 percent yesterday. For the week, the greenback is set for a 0.4 percent appreciation against the euro and a 1.4 percent gain against Japan’s currency. Jobless Report U.S. employers added 185,000 jobs in July, following a 195,000 gain in June, according to the median forecast of economists in a Bloomberg News survey before the Labor Department’s figures today. The jobless rate is projected to have declined to 7.5 percent from 7.6 percent. Data yesterday showed manufacturing expanded faster than analysts estimated and initial jobless-benefit claims fell to a five-year low. The dollar rose 5.6 percent this year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The yen has fallen 9.4 percent, the worst performer after the Aussie, and the euro gained 5.9 percent. The Federal Open Market Committee kept its monthly purchases of Treasuries and mortgage securities unchanged at $85 billion this week, while warning that persistently low inflation could hamper the recovery. It repeated a pledge to continue stimulus until the U.S. labor market outlook has improved substantially. Expectations Building Half of the 54 economists surveyed by Bloomberg last month said the Fed may curb its monthly purchases to a total of $65 billion at its Sept. 17-18 meeting. The Bloomberg Dollar Index, which tracks the greenback against 10 major currencies, was little changed at 1,034.23 after climbing 0.9 percent yesterday, and is bound for a 1.1 percent advance this week. “The street is probably long USD now in anticipation of strong U.S. jobs data, so disappointment would elicit a larger reaction,� Sharon Zollner, a Wellington-based senior economist at ANZ Bank New Zealand Ltd., wrote in a note to clients today, referring to bets the dollar will strengthen. The Australian dollar dropped for a fifth day before central bank officials gather for a monetary policy decision next week, when they are expected to lower borrowing costs. The Reserve Bank will cut its overnight cash rate target by 25 basis points to 2.5 percent, according to all but one of 27 economists surveyed by Bloomberg News. Traders agree, seeing a 94 percent chance of a reduction, according to interest-rate swaps data compiled by Bloomberg. The Aussie fell 0.3 percent to 89.03 U.S. cents after sliding to 88.89 U.S. cents, a level unseen since August 2010. It is headed for a 3.8 percent decline this week, the steepest drop since September 2011. To contact the reporters on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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