Dollar Surges to 13-Year High Versus Yen as Jobs May Spur Fed
Date: June 5, 2015
Source: Bloomberg by Lananh Nguyen
The dollar surged to a 13-year high against the yen as a report showed U.S. payrolls climbed in May, boosting the case for the Federal Reserve to raise interest rates this year.
Image linked Google Finance
The U.S. currency gained against most of its major peers after the jobs gain exceeded forecasts and worker pay gains accelerated. The Fed is likely to tighten monetary policy this year if the labor market improves further, William C. Dudley, president of the Federal Reserve Bank of New York, said in a speech in Minneapolis. Futures prices showed a better-than-50-percent chance the central bank will increase rates by its September meeting, according to Bloomberg data.
“The king-dollar trade remains on,” Matt Weller, an analyst at Gain Capital Holdings Inc.’s Forex.com unit in Grand Rapids, Michigan, said by phone. “This puts September right in the crosshairs in terms of a Fed rate hike. I’m still optimistic on the dollar.”
The dollar advanced 1 percent to 125.63 yen as of 5 p.m. in New York, after earlier reaching the highest level since June 2002. It added 1.1 percent to $1.1114 per euro, paring a weekly loss to 1.2 percent.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major peers, added 0.8 percent to 1,192.75.