Dollar Headed for Gains against Euro and Yen this Week on Strong Economic Report

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Dollar Headed for Gains against Euro and Yen this Week on Strong Economic ReportThe dollar appeared to be headed to gain against the yen and the euro this week, backed by favorable economic data which fuelled speculation that the Federal Reserve will hike interest rates soon.

The dollar advanced for the fifth straight day against its counterparts as Philadelphia’s factory activity rose the strongest in seven months. Another report showed that new jobless claims in U.S. were close to a seven-year low.

In New York trade, the dollar remained slightly unchanged at $1.3816 a euro as of 10.52 a.m., resulting in a gain of 0.5 percent this week. It also remained steady at 102.42 yen, making it set for a 0.8 percent gain since last Friday. The euro, which has advanced 0.2 percent this week, was trading at 141.46 yen.

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“The jobless claims and Philadelphia Fed reports were both good, and the dollar was bid on the back of that,” Kazuo Shirai, a Los Angeles-based trader at Union Bank NA told Bloomberg. “If U.S. jobs numbers stay positive, the Fed will probably continue to taper at the current pace.”

The Bloomberg Dollar Spot Index, which monitors the greenback against 10 counterparts, remained slightly unchanged at 1,010.39, after earlier closing at 1,010.68 on Thursday, its strongest since April 7.

The Federal Reserve Bank of Philadelphia’s factory index rose to 16.6 this month, the strongest since September. New unemployment benefits applications gained 2,000 to 304,000 in the week ended April 12, up from 304,000 a week earlier, which was the weakest since September 2007, reported the Labor Department. 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