The dollar gained versus most of its major counterparts, trading at almost the strongest against the yen since May 2010, as a private report showed U.S. companies added more workers than forecast in February.
The euro declined against the greenback for the first time in three days as euro-area exports fell in the fourth quarter for the first time in three years. The Canadian dollar weakened after the Bank of Canada indicated it won’t raise interest rates anytime soon. Central bank policy meetings for the euro area and Japan are scheduled to conclude tomorrow.
The ADP Research Institute’s jobs report “is definitely part of the move,” Douglas Borthwick, a managing director and head of foreign exchange at Chapdelaine & Co. in New York, said in a telephone interview. “Positive data is always seen as being yen negative, and therefore positive for dollar-yen.”
The U.S. currency rose 0.8 percent to 94.07 yen at 5 p.m. in New York after touching 94.12, its highest level since Feb.
25. The dollar climbed 0.7 percent to $1.2967 per euro. The 17-nation currency increased 0.2 percent to 121.98 yen.
The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, appreciated 0.6 percent to 82.574 after rising to 82.604, its highest level since Aug. 20.
The dollar has breached 93.72 yen ahead of a key resistance range from 94.78 to 95, Cilline Bain, a London-based technical analyst at Credit Suisse Group AG, wrote today in a note to clients.
The greenback may risk to 99.86, which would be its highest level since April 2009, if it breaks that resistance, he said. Resistance refers to an area on a chart where sell orders may be clustered.
South Africa’s rand decreased versus all 16 of its most-traded peers ahead of data that is expected to show that gross reserves declined in February. It fell 1 percent to 9.1245 per dollar after earlier declining to its lowest level since Jan.
The Polish zloty weakened the most in six weeks after the central bank cut its benchmark interest rate by 0.5 percentage point, defying expectations of a 0.25 reduction in borrowing costs. The currency declined 1.2 percent to 3.1990 per dollar after falling to 3.2001, its lowest level since Feb. 26.
South Korea’s won advanced for a second day versus the dollar after a surge in U.S. equity markets prompted global funds to buy South Korean stocks. It gained 0.4 percent to 1,082,60 per dollar after reaching 1,082.19, its highest level since Feb. 28. The Dow Jones Industrial Average closed at a record 14,253.77 yesterday.
The loonie, as the Canadian dollar is known for the image of the water fowl on the C$1 coin, weakened 0.5 percent to C$1.0320 per U.S. dollar, after falling as much as 0.7 percent.
The Swiss franc fell against most of its most-traded peers amid the flight to safer assets. The currency decreased 0.9 percent to 94.88 centimes per dollar after falling to its weakest since Nov. 16.
The euro may extend gains versus the franc after strengthening through a key resistance level at 1.2291 francs, said Peter Rosenstreich, chief foreign-exchange strategist at Swissquote Bank SA in Geneva. That represents the 38 percent retracement of the euro’s decline from January and February, he said, citing so-called Fibonacci analysis.
The next major resistance level is at 1.2345 francs, the 50 percent retracement of that drop, he said. Resistance refers to an area where sell orders may be clustered.
The pound weakened for the first time in three days against the dollar as 11 of the 39 economists surveyed by Bloomberg predict the central bank will increase its asset-purchase target to at least 400 billion pounds ($604 billion) from the current 375 billion pounds at the end of its policy meeting tomorrow.
“The risk, if there is a surprise at all, is that there will be more asset purchases and that will weigh on sterling,” said Raghav Subbarao, a foreign-exchange strategist at Barclays Plc in London.
The pound dropped 0.7 percent to $1.5018 after falling to $1.4986 on March 1, the weakest level since July 2010. The U.K. currency declined 0.1 percent to 86.34 pence per euro.
The increase of 198,000 in U.S. employment followed a revised 215,000 gain the prior month, figures from the Roseland, New Jersey-based ADP showed today. The median forecast of 41 economists surveyed by Bloomberg called for an advance of 170,000.
The report “is definitely having a positive effect on dollar-yen,” Dan Dorrow, the head of research at Faros Trading LLC in Stamford, Connecticut, said in a telephone interview. “Within the G-4, this consistently decent U.S. data is supporting the dollar against the pound, euro and yen.”
The U.S. jobless rate for February will be released on March 8. It is forecast to hold at 7.9 percent, while payroll jobs increased by 163,000, according to Bloomberg News surveys.
The dollar has gained 3.1 percent this year, the second-best performer among 10 developed market currencies measured by Bloomberg Correlation-Weighted Indexes. The yen is down 5.8 percent while the euro is up 1.2 percent.