Dollar Extends Gain Versus Commodity Currencies Amid Greek Vote

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The dollar headed for a second-straight weekly gain before Greece holds a vote that may go a long way to determining if the nation stays in the euro area.

The greenback strengthened versus 13 of its 16 major peers this week, with the biggest advances coming against currencies of commodity-producing nations. Australia’s dollar dropped to a six-year low on Friday and New Zealand’s touched its weakest level in five years the day before.

“With the Greek referendum, the appetite to put on any risk at this stage is still very limited,” said Mitul Kotecha, head of Asia Pacific foreign-exchange strategy at Barclays Plc in Singapore.

Greek voters are split heading into Sunday’s referendum on European bailout proposals that the government has rejected, according to a poll commissioned by Bloomberg. That’s left traders on tenterhooks, with U.S. markets closed Friday for the Independence Day holiday.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major peers, was 0.1 percent higher at 1,187.07 as of 4:26 p.m. Toronto time, up 0.6 percent this week. It rose to 1,192.05 on Thursday, the highest since June 8, before retreating as a U.S. jobs report showed wage growth unexpectedly stalled last month.

The poll commissioned by Bloomberg showed 43 percent intend to vote “no” to the austerity demands while 42.5 percent back a “yes” result, according to the survey of 1,042 people by the University of Macedonia Research Institute of Applied Social and Economic Studies. Finance Minister Yanis Varoufakis vowed to quit if the government loses the vote.

Price Swings

While the dollar declined 0.3 percent to $1.1112 per euro on Friday, it was set for a gain this week of 0.6 percent.

The outlook for price swings in the common currency against its U.S. counterpart rose for the first time in three days. Implied one-month volatility, a measure of anticipated price swings in the euro-dollar exchange rate, climbed to 12.70 percent, compared with an average for this year of 11.77 percent, data compiled by Bloomberg show.

The 223,000 jobs created in the U.S. in June were less than the 233,000 forecast in a Bloomberg survey of economists. Average hourly earnings rose 2 percent from a year ago, compared with a 2.3 percent analyst estimate.

That clouded the outlook for U.S. interest rates, with investors weighing when the Federal Reserve will tighten policy for the first time since 2006.

“We still look for the Fed to hike rates in September,” said Barclays’s Kotecha.

The dollar was set for a 2.4 percent weekly gain versus the kiwi after a slide in milk prices increased speculation New Zealand’s central bank will cut interest rates. The U.S. currency was up 2 percent against the Aussie, which was weighed down by a drop in iron-ore prices.

Norway’s krone and Canada’s dollar were also among the week’s biggest losers, while the yen rose versus all of its major counterparts as investors sought out haven assets.

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