U.S. Dollar Higher on Economic Outlook

A gauge of the dollar was within 0.1 percent of a seven-month high on bets U.S. economic growth will boost chances the Federal Reserve will raise interest rates next year sooner than some traders anticipate.

The yen approached the weakest since 2008 amid speculation Prime Minister Shinzo Abe will appoint a minister who may shift the national pension fund toward riskier assets, damping demand for Japan’s currency. Policy decisions by the Bank of Japan and the European Central Bank are due tomorrow. Australia’s dollar held a three-day drop before data forecast to show the South Pacific nation’s economy slowed. New Zealand’s kiwi traded near a six-month low after milk prices declined.

“The U.S. dollar has a bit further it can go,” said Janu Chan, an economist at St. George Bank Ltd. in Sydney. “The U.S. data looks strong and supportive of Fed rate hikes some time. If this improvement continues, then there’s a good chance that the Fed could move earlier than what markets are anticipating.”

Bloomberg

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