The dollar rose to a seven-year high versus the yen before data forecast to show U.S. manufacturing outpaced global peers, reinforcing the outlook for higher interest rates in the world’s largest economy.
The dollar extended gains against the currencies of commodity-producing nations after oil slumped to a five-year low. Australia’s dollar slid to a four-year low on speculation demand for the nation’s gold will wane after voters in Switzerland rejected a referendum to force the Swiss National Bank to hold more of the metal. Australia is the world’s largest gold producer after China. The Swiss franc weakened.
“The dollar will probably remain strong amid declines in oil prices and dovishness among other nations’ central banks,” said Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services. “If oil prices continue to fall, that would build the case for easy monetary policy in more places than just Europe and Japan.”
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