Dollar Posts Its Biggest Weekly Advance Against the Yen Since February
Dec. 10 (Bloomberg) -- The dollar posted its biggest weekly gain since February against the yen on signs
``There's no reason to suspect that
The dollar surged 3.1 percent against the yen this week, to 105.22 yen at 5 p.m. in
This week's gain against the yen is the biggest since
Hedge funds and other speculators reduced bets on further euro gains for the fourth straight week this week, data from the Commodity Futures Trading Commission showed today.
Gains for the dollar this week accelerated after European and Japanese officials said its slide was unwelcome.
``Money's going to go where it can get the highest growth and it's not Europe or Japan,'' said Joseph Portera, managing director overseeing $8 billion of global fixed income at Mackay- Shields Financial Corp. in New York. The stronger yen ``certainly hurts their competitiveness globally,'' just as the higher euro crimps European growth, he said.
Expectations for higher
The dollar had fallen the past 10 weeks against the yen and eight straight weeks against the euro.
``The market had moved a long way in a short period of time,'' said James McCormick, London-based head of foreign- exchange research at Lehman Brothers Holdings Inc. ``We really needed to see a pause.''
Lehman, the most accurate forecaster of exchange rates last quarter in a Bloomberg survey, predicted the dollar will resume its decline, reaching $1.40 per euro next year.
Japanese Prime Minister Junichiro Koizumi yesterday in
``Finance officials want to see the pace and the volatility of the dollar's move diminished,'' said Thomas O'Malley, head of global currency fund management in San Francisco at Barclays Global Investors, with more than $1 trillion of assets.
The dollar's decline has eroded the purchasing power of revenue earned by oil-exporting countries.
``We should consider the dollar depreciation in changing the price band floor'' set by OPEC for oil, Iranian oil minister Bijan Namdar Zanganeh said in an interview today before a meeting in Cairo of Organization of Petroleum Exporting Countries.
A stronger currency euro damp European growth by making exports more expensive. Industrial production in
The quarterly Tankan index of confidence among large manufacturers may fall to 23 in December from a 13-year high of 26 in September, according to the median of 20 forecasts in a Bloomberg survey. The report is scheduled for release Dec. 15.
The dollar's slide may resume on speculation
Because of the
A government report will probably show on Dec. 16 that the
U.S. Treasury Secretary John Snow suggested in an interview on Dec. 3 he wouldn't attempt to counter the dollar's slide. ``Markets can overshoot and undershoot, and they often do, but the virtue of markets is they're self correcting,'' he said.