The dollar rose for a third day against the yen, its longest advance this month, on speculation the U.S. economic recovery is strong enough to withstand a reduction in monetary stimulus by the Federal Reserve.
The Bloomberg Dollar Spot Index headed for its highest in more than four months before a U.S. report economists forecast will show applications for jobless benefits declined last week. Australia’s dollar plunged after employers unexpectedly cuts positions, sending the Aussie to its weakest since August 2010 versus the greenback and an eight-year low against its New Zealand counterpart. South Korea’s won slid to a one-week low.
“The growing consensus in markets is that the Fed won’t stop tapering,” said Yasuhiro Kaizaki, the vice president for global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “The dollar is likely to advance beyond recent highs before” the Fed holds a policy meeting from Jan. 28-29, he said.