The dollar headed for a weekly gain versus a basket of its peers before data forecast to show Americans increased spending for an eighth month, adding to evidence the U.S. economy is growing.
The greenback held its biggest advance since October versus the euro after data yesterday showed U.S. gross domestic product expanded for an 11th straight quarter. The Federal Reserve said this week it would reduce stimulus for a second month. The yen pared its biggest monthly advance against the dollar since April 2012 as concern eased about a selloff in emerging markets. New Zealand’s dollar was poised for a third weekly drop after the central bank said the “high exchange rate” is unsustainable.
“The U.S. expansion has been confirmed, and that’s been taken as a positive for the dollar,” said Yasuhiro Kaizaki, the vice president for global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “Emerging markets have calmed down, triggering a recovery in risk appetite that’s helped the dollar.”