MW: Dollar breaks above ÂĄ123 for first time in nearly 8 years
The dollar rose to its highest level against the yen since July 2007 on Tuesday, extending its gains after Commerce Department data showed an uptick in U.S. business investment.
The U.S. currency also gained against the euro, although less sharply.
Orders for durable U.S. goods declined by a seasonally adjusted 0.5% in April, in line with expectations from economists surveyed by MarketWatch. Investors focused on the core capital-goods number, which is typically interpreted as a proxy for business investment. It climbed 1% in April, marking a second straight monthly gain.
The dollar USDJPY, +1.44% broke above 123 yen after the data, its first time above that level since July 2007. It recently traded at ÂĄ123.24, compared with ÂĄ121.55 Monday.
The capital-goods number added to a spate of strong data from last week which showed that consumer-price inflation and home construction have begun to rebound. The dollar finished the week higher against the euro on Friday for the first time in five weeks.
The euro EURUSD, -0.7105% fell to its lowest level against the dollar since late April earlier in the global day. The shared currency recently traded at $1.0906, compared with $1.0981. The pound GBPUSD, -0.6593% fell to $1.5384, compared with $1.5475 on Monday.
Worries about a Greek default pushed the euro lower, analysts said. Concerns emerged over the weekend as Greek Interior Minister Nikos Voutsis said Sunday that the government won’t have the money it is due to repay the International Monetary Fund next month unless it strikes a deal with international creditors over further rescue funding.
Read: Currency traders should start paying attention to headlines about Greece
Greece is scheduled to repay €1.6 billion ($1.76 billion) to the IMF between June 5 and June 19.
Speaking in Israel, Federal Reserve Vice Chairman Stanley Fischer reiterated the central bank’s position that interest-rate increases will follow a “gradual and relatively slow” trajectory, suggesting they could reach 3.25% to 4% in three to four years.
Fischer’s comments, and the strong data, increased the likelihood that the central bank will raise rates for the first time since 2006 as early as its September meeting. Higher interest rates are typically viewed as a positive for the dollar, because they would increase the yield on dollar-denominated deposits.
The ICE U.S. Dollar Index DXY, +0.66% , a measure of the dollar’s strength against a basket of six rivals, was up 1.08% to 97.0400, its first time above the 97-level in about a month.
