The dollar remained higher after a four-day advance versus the euro as U.S. economic data surpassed analyst expectations by the most this year, bolstering the case to reduce monetary stimulus that tends to debase the currency.
The Bloomberg U.S. Dollar Index was near a week-high before reports today that may show gains in industrial production and New York region manufacturing. The Citigroup Economic Surprise Index, which shows if U.S. data beat or missed expectations, touched a 2013 peak this week, adding to bets the Federal Reserve will start trimming bond purchases next month. The pound held near the strongest in six weeks against the euro before figures that may show U.K. retail sales rose in July.
“Our main scenario is for the dollar to strengthen,” said Ken Takahashi, an assistant vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “Should strong economic numbers push 10-year Treasury yields above this year’s high of 2.75 percent, that would boost the dollar above the recent range.”