Euro Rises From Lowest in Month as Draghi Strengthens Pledge

The euro rose from the lowest level in a month as European Central Bank President Mario Draghi strengthened his pledge to keep interest rates low for an extended period to protect economic gains.

The greenback touched a four-month high against a basket of peers as initial-jobless claims dropped before the U.S. releases its nonfarm-payrolls report tomorrow. Emerging-market currencies plunged on speculation that forecast U.S. jobs gains will be enough to allow the Federal Reserve to keep cutting bond purchases that have added liquidity to global markets. Canada’s dollar fell to a four-year low.

The euro gained 0.2 percent to $1.3608 at 5 p.m. in New York after declining to $1.3549, the lowest level since Dec. 5. It failed to fall below the 100-day moving average of $1.3546, a measure of momentum. The common currency added 0.2 percent to 142.65 yen. The dollar closed little changed at 104.82 yen.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major counterparts, dropped 0.1 percent to 1,028.21 after climbing to 1,030.42, the highest level since Sept. 9.

(Source: Bloomberg)        

Aussie Dollar Falls Before Fed Minutes on Bets Taper to Continue

The Australian dollar weakened versus its major peers amid speculation the U.S. Federal Reserve will continue to reduce stimulus that has buoyed asset prices around the world.

The Aussie held its biggest decline in three weeks against the greenback before minutes are released of the Fed’s meeting last month, when policy makers decided to begin tapering bond purchases. A gauge of construction activity in Australia declined in December, a report today showed. The nation’s currency traded near a five-year low versus its New Zealand counterpart.

Australia’s dollar fell 0.1 percent to 89.17 U.S. cents as of 11:04 a.m. in Sydney from yesterday, when it declined 0.5 percent. It was little changed at NZ$1.0774, extending yesterday’s 0.4 percent drop. It touched NZ$1.0733 on Dec. 18, a level unseen since October 2008. New Zealand’s currency weakened 0.1 percent to 82.76 U.S. cents.

San Francisco Fed President John Williams said yesterday quantitative easing will probably end this year if the recovery unfolds as expected. The central bank may reduce its purchases in $10 billion increments and end the program in December 2014, according to the median estimate of economists surveyed by Bloomberg on Dec. 19.

The Australian Industry Group’s construction index fell to 50.8 in December from 55.2 the previous month, according to a report today. Readings above 50 signal expansion.

(Source: Bloomberg)

Dollar Snaps Four-Day Advance on Services Report; Won Tumbles

The dollar fell for the first time in five days, ending its longest rally in two months, after a report showed services unexpectedly declined in December.

The euro climbed from a one-month low against the dollar as industry data confirmed the region’s services output expanded for a fifth month before the European Central Bank discusses interest rates on Jan. 9. South Korea’s won tumbled on bets the central bank will cut borrowing costs. South Africa’s rand gained after Moody’s Investors Service said the country will retain its investment-grade credit rating.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, dropped 0.2 percent to 1,023.87 at 5 p.m. in New York after climbing to 1,029.67 on Jan. 2, the highest since Sept. 9. It completed a six-day rally on Nov. 1.

The dollar fell 0.3 percent to 1.3629 per euro after rising to $1.3572, the highest level since Dec. 5. The greenback slid 0.6 percent to 104.22 yen, while the Japanese currency advanced 0.3 percent to 142.04 per euro.

(Source: Bloomberg)