U.S. Dollar Headed for Strong Quarter

The dollar headed for its best quarter since 2008 with reports this week predicted to reinforce U.S. economy is strong enough for the Federal Reserve to raise rates next year while recoveries in Japan and Europe falter.

The U.S. currency has appreciated at least 1.9 percent against all of its 16 most active counterparts since June 30 amid prospects of higher U.S. interest rates. The yen was set for its first quarterly decline in 2014 after industrial production unexpectedly fell, while the euro held near a 22-month low before data that may show the currency region’s inflation stayed at the lowest since 2009. A gauge of emerging-market peers headed for the biggest monthly drop since May 2013.

“Economic indicators this week will likely show a strong U.S. and weak Japan and Europe,” said Yujiro Goto, a currency strategist in London at Nomura Holdings Inc. “The trend of a strong dollar against the yen and euro will stay.”


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