The dollar rose to its highest since November versus the euro amid speculation the Federal Reserve will continue reducing stimulus as the U.S. economy improves.
The Bloomberg Dollar Spot Index held near its highest level since September after a Citigroup Inc. gauge of economic surprises reached the highest in almost two years last week. The yen advanced against all its major peers as prospects of a slowdown in China fueled demand for Japan’s currency as a haven. The Bank of Japan begins a two-day policy meeting tomorrow. The Australian dollar fell to the lowest in more than three years with China due to report data including industrial production and economic growth today.
“More people are leaning toward simply the fact that the Fed will taper and that’s supporting the U.S. dollar,” said Hans Kunnen, a senior economist at St. George Bank Ltd. in Sydney. “The U.S. is committed to tapering, and they will. The recovery is sufficiently robust to allow that to happen.”