Dollar Advances Versus Yen as U.S. Manufacturing Rises to Seven-Month High
The dollar held onto yesterday’s gains versus the yen before a report that may show orders placed with U.S. factories fell at a slower pace, adding to signs the economic recovery is gaining traction.
The yen traded near a four-week low against New Zealand’s dollar on speculation Asian stocks will extend a global rally after U.S. manufacturing expanded in December at the fastest pace in seven months, boosting demand for higher-yielding assets. Canada’s dollar was close to a 2.5-year high versus the greenback as commodities advanced yesterday, increasing the appeal of currencies tied to global growth.
“Growth in the U.S. seems to be picking up,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate and Investment Bank in Tokyo. “This is likely to be positive for the dollar.”
The dollar traded at 81.70 yen as of 8:25 a.m. in Tokyo from 81.74 in New York yesterday, when it rose 0.8 percent, the most since Dec. 7. The U.S. currency was at $1.3351 per euro from $1.3361. The euro fetched 109.08 yen from 109.20 yen. The Canadian dollar was at 99.28 Canadian cents per U.S. dollar from 99.38 cents yesterday, when it reached 98.89 cents, the strongest level since May 2008.
New Zealand’s dollar bought 63.21 yen from 63.20 yen yesterday, when it touched 63.44 yen, the highest since Dec. 7. The so-called kiwi was at 77.35 U.S. cents from 77.34 cents.
The Standard & Poor’s 500 Index of stocks climbed 1.1 percent and the Thomson Reuters/Jefferies CRB Index of 19 raw materials rose 0.1 percent yesterday after the Institute for Supply Management’s factory index rose in December to 57, the highest level since May, from 56.6 in the previous month. Readings greater than 50 signal growth.
Bookings for U.S. manufacturers’ goods declined 0.1 percent in November, after a 0.9 percent decrease in October, according to a Bloomberg News survey of economists before the Commerce Department releases its report today.
“People are going to be more comfortable after looking at data like this to start placing money in riskier assets,” said Brian Taylor, chief currency trader a Manufacturers & Traders Trust in Buffalo, New York. “Money is flowing in to commodity currencies, and Canada is up as oil and equities rise.”
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