The dollar marched higher against the euro and yen on Monday as investors wagered that interest rates were set on a diverging course in the United States, Europe and Japan, giving a lift to Tokyo stocks in the process.
Pledges of policy stimulus from the heads of the European Central Bank and the Bank of Japan pressured both the euro and the yen, leaving the U.S. dollar as the winner by default. The common currency skidded as far as $1.3185 EUR=, from around $1.3246 late in New York on Friday, while the dollar was up at 104.20 yen JPY= and near a seven-month peak.
The euro also lost ground against many other currencies, notably hitting a near 10-month low on the Australian dollar at A$1.4163. The yen’s fall was taken as positive for Japanese exports and corporate earnings and helped both the Topix .TOPX and the Nikkei .N225 nudge up 0.2 percent. Moves elsewhere were muted and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.27 percent.