A gauge of the dollar against 10 major counterparts was near the highest in four years as an improving US growth outlook adds to expectations the Federal Reserve is moving toward raising borrowing costs next year.
The US currency has risen versus all of its 16 most traded peers this month as the Fed stays on track to end its bond-buying program, known as quantitative easing, in October. The yen headed for its first weekly gain since the start of August as the US expanded its bombing of Islamic State militants from Iraq to neighboring Syria, spurring demand for the Japanese currency as a haven.
"The strong dollar trend across the board is continuing," said the trader at Union Bank NA in Los Angeles. "The Fed is on track to end QE in October and is likely to raise rates by middle of next year as planned, while we haven't seen much improvement in other nations."
The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major peers, was little changed at 1,061.60 as of 8:41 am in Tokyo after rising to 1,062.75 yesterday, the highest close since June 2010.
The dollar bought 108.53 yen from 108.75, after reaching 109.46 on Sept. 19, a level not seen since August 2008. The yen has gained 0.5 percent against the greenback this week. The US currency was little changed at $1.2757 per euro after gaining to $1.2697 yesterday, the strongest since November 2012.
The US gross domestic product grew an annualized 4.6 percent in the second quarter, more than the previous estimate of 4.2 percent released Aug. 28, according to a Bloomberg survey of analysts before today's Commerce Department report. The Thompson Reuters/University of Michigan final consumer sentiment index rose to 84.8 this month, the highest in more than a year, a separate Bloomberg survey projected.
Source: bloomberg.com
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