US Dollar Rises Before Jobs Data as Norway’s Krone Drops With Oil
London (Dec 2) A gauge of the dollar rose before employment data this week that analysts said will show the U.S. economy added more than 200,000 jobs for the 10th consecutive month in November.
The Norwegian krone fell against all of its 16 major currencies as oil prices resumed a decline. Australia’s currency slid after the central bank kept interest rates at a record low to spur the economy. The yen dropped versus the greenback as Standard & Poor’s said its view of Japan hasn’t changed, a day after Moody’s Investors Service cut the nation’s credit rating, sending the currency higher.
“I’m a big fan of the U.S. dollar,” said Neil Jones, head of hedge fund sales at Mizuho Bank Ltd. in London. “We’ve seen some very encouraging economic data and the upside is likely to continue. The policy divergence between the Fed and the rest of the developed economies is supportive for the dollar.”
The Bloomberg Dollar Spot Index, which tracks the greenback against the currencies of 10 trading partners, rose 0.3 percent to 1,107.01 at 6:59 a.m. New York time. It closed at 1,106.90 on Nov. 28, the highest level since March 2009. The gauge has climbed 8.6 percent this year, poised for its biggest advance since 2008.
The dollar appreciated 0.2 percent to $1.2442 per euro and climbed 0.5 percent to 118.96 yen, having reached 119.14 yesterday, the strongest since August 2007. The euro rose 0.3 percent to 148 yen.
Jobs Data
U.S. employers added 230,000 jobs last month, compared with 214,000 in October, according to economists surveyed by Bloomberg News before the Dec. 5 report.
Brent crude dropped 1.1 percent, resuming a decline that has seen prices slide to a five-year low.
Federal Reserve Vice Chairman Stanley Fischer and New York Fed President William C. Dudley, speaking at separate events yesterday in New York, both stressed the positive economic impact from lower oil prices. Both played down the risk that plunging energy costs could push inflation further below the central bank’s goal.
“I’m not very worried,” Fischer told an audience at the Council on Foreign Relations. “The lower inflation that we’ll get from the lower price of oil is going to be temporary.” He also said lower oil prices were “a phenomenon that’s making everybody better off.”
The U.S. currency gained 8.7 percent in the past year, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro fell 1 percent and the yen dropped 7.4 percent.
Norwegian Krone
While the fall in oil prices has been positive for the dollar, it has hurt currencies from oil-producing countries, including Norway, where the krone declined 0.9 percent to 6.9987 per dollar after depreciating to 7.0618 yesterday, the weakest level since March 2009.
The Organization of Petroleum Exporting Countries may hold an emergency meeting in the first quarter, Venezuela’s Foreign Minister Rafael Ramirez said in an interview with Panorama newspaper. OPEC, responsible for about 40 percent of the world’s oil supply, resisted calls from members including Venezuela to reduce output at a Nov. 27 meeting.
The Aussie fell 0.5 percent to 84.52 U.S. cents, having lost 5.2 percent against the greenback so far this year. That was the fourth day of declines, the longest losing streak since the period ended Sept. 15.
The Reserve Bank of Australia kept the overnight cash rate target at 2.5 percent, saying in a statement that “key commodity prices have declined significantly in recent months.” Today’s board decision was predicted by all economists surveyed by Bloomberg News.
Source: Bloomberg
