Dollar Gains against Euro on Stronger U.S. Economic Data

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Dollar Gains against Euro on Stronger U.S. Economic DataThe dollar advanced last week against the euro, the longest winning streak in over two years, after various economic reports from jobless claims to housing indicated stronger economic growth, boosting speculation the Federal Reserve will hike interest rates in 2015.

The U.S. currency rose 1.2 percent to trade at $1.3242 per euro at the close of trading in New York, its sixth consecutive weekly advance and the longest such since the week through January 13, 2012. The dollar touched $1.3221, the highest level since September 9. The greenback rose 1.6 percent to 103.95 yen after jumping to 104.19, the strongest level since January 23. The euro gained 0.4 percent to 137.64 yen.

The dollar rose after Fed Chair Janet Yellen acknowledged the job gains achieved over the past five years of economic recovery in her speech in Jackson Hole, Wyoming. The pound fell after U.K. consumer-price inflation appreciated less than expected.

“The market saw further evidence of monetary-policy divergence in the Group of 10,” Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York, told Bloomberg News. “The dollar is the main story, but sterling to some extent as well. Currencies where central banks are turning more hawkish are doing well, but it’s been mostly about the dollar.”

Large speculators such as hedge funds raised bets that the euro will decline against the dollar to the highest level since July 2012. The divergence in the number of wagers on a drop against those on an advance, the net shorts, stood at 138,825 on August 19, up from 126,017 on August 12, data from Commodity Futures Trading Commission showed. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com