Dollar Surges on ECB Monetary Stimulus Pledge

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Dollar Surges on ECB Monetary Stimulus PledgeThe dollar jumped for the third consecutive week after the European Central Bank reiterated its stance to boost monetary stimulus as the Federal Reserve looks set to increase interest rates.

The greenback had plunged on Friday after employers absorbed fewer workers than expected last month. The euro fell to its lowest level in over two years after the ECB retained rates while President Mario Draghi promised to increase its balance sheet.  The Japan’s yen fell to its lowest in seven years after Bank of Japan Governor Haruhiko Kuroda expressed willingness to resort to any easing measures to curb deflation.

The U.S. currency rose the third week versus the yen, advancing 2 percent to 114.60 and rising to 115.59, its strongest level since November 2007. It rose 0.7 percent to $1.2455 against the euro, its third weekly advance against the shared currency. The euro rose 1.5 percent to trade at 142.73 yen.

“The U.S. economy’s not perfect, but it does seem to be operating much better than most of its peers,” Stephen Stanley, a chief economist at Amherst Pierpont Securities LLC, told Bloomberg News. “The broader picture’s still pretty supportive for the dollar.”

The yen has lost much ground after the Bank of Japan unexpectedly boosted stimulus last week. The central bank intends to boost the monetary base 80 trillion yen ($698 billion) per year, from the previous addition of 60 trillion yen to 70 trillion yen. The yen touched 119.79 per Swiss franc, its weakest level in over three decades and also declined the fourth week versus the euro, the longest losing streak since December. 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