The dollar rose the most in more than a year as a U.S. jobs report exceeded all forecasts, highlighting a growing gulf between the world’s largest economy and other developed nations. The euro sank the most since September as two European Central Bank officials said policy makers may consider broad-based asset purchases in January. The yen weakened beyond 120 per dollar for the first time since July 2007 before elections Dec. 14. Hedge funds and other large speculators bet the dollar’s rally will continue, pushing wagers on it versus eight major peers to a record. A measure of U.S. consumer confidence due next week is forecast to rise to a seven-year high.
“Just based on our data, that bodes well for the dollar, and the action from other central banks also serves as a catalyst,” said Quincy Krosby, a market strategist based in Newark, New Jersey, at Prudential Financial Inc., which oversees $1 trillion in assets. “The Japanese are obviously still stimulating the economy, bringing the yen down weaker most likely, and you have the European Central Bank inching ever-closer to continuing their form of quantitative easing.”
The Bloomberg Dollar Spot Index, which tracks it against 10 trading partners, rose 1.4 percent, a seventh straight weekly advance and the biggest five-day gain since the period ended Nov. 1, 2013. The measure closed at 1,122.34 yesterday, its highest since March 2009.