Publications
Partners
London - The euro strengthened versus the dollar amid investor speculation that the pace of last week’s surge in the greenback could act as a brake on the Federal Reserve’s move toward raising US interest rates.
The 19-member common currency rose from near the weakest level since April as traders pared back wagers on its slide. Data from the Washington-based Commodity Futures Trading Commission showed hedge funds and other large speculators increased net wagers for the euro to weaken the most since June in the week ended November 3.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, halted a four-day gain. It jumped the most since March on Friday as robust US payrolls data boosted speculation the Fed will lift rates next month.
“Of course the strong U.S. labor market report is a signal they may hike rates, but they’re not going to completely ignore the currency,” said Lutz Karpowitz, a senior currency strategist at Commerzbank AG in Frankfurt.
“If you push it too far, they’re not going to hike rates. There will be gradual dollar strength over the next year but you have to be patient. That’s why we see higher euro-dollar this morning.”
The euro rose 0.3% to $1.0773 as of 11:32, after falling to $1.0707 on November 6, the least since April 23. It climbed 0.7% to ¥133.12. The dollar gained for a sixth day versus the yen, advancing 0.4% to ¥123.58. Bloomberg’s Dollar Spot Index was little changed Monday after surging 1.9% last week.
