The dollar rose for a second day against the yen before a report that may show orders placed with U.S. factories fell at a slower pace, adding to signs the recovery in the world’s largest economy is gaining traction.
The yen fell to a one-week low versus the euro as Asian stocks extended a global rally after data yesterday showed U.S. manufacturing expanded at the fastest pace in seven months, spurring demand for higher-yielding securities. Canada’s dollar was close to its strongest in 2 1/2 years as crude oil was near a 27-month high, increasing the appeal of currencies tied to worldwide growth. Taiwan’s dollar rose toward a 13-year high after global funds increased holdings of the island’s assets.
“Growth in the U.S. seems to be picking up,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate and Investment Bank in Tokyo. “This is likely to be positive for the dollar and negative for the yen.”
The greenback advanced to 82.12 yen at 2:47 p.m. in Tokyo from 81.74 in New York yesterday, when it rose 0.8 percent, the most since Dec. 7. The U.S. currency was at $1.3350 per euro from $1.3361. The yen declined to 109.63 per euro from 109.20 after earlier falling to 109.72, the weakest since Dec. 22.
Canada’s dollar was at 99.31 Canadian cents per U.S. dollar from 99.38 cents yesterday, when it reached 98.89 cents, the strongest level since May 2008. New Zealand’s dollar bought 63.27 yen from 63.20 yesterday, when it touched 63.44, the highest since Dec. 7. It was at 77.04 U.S. cents from 77.34.
Japanese, Asian Equities
The Nikkei 225 Stock Average climbed 1.6 percent and the MSCI Asia Pacific Index rose 0.4 percent. The Standard & Poor’s 500 Index of stocks gained 1.1 percent yesterday after the Institute for Supply Management said its factory index rose in December to 57, the highest level since May, from 56.6 in November. Readings greater than 50 signal growth.
Bookings for U.S. manufacturers’ goods declined 0.1 percent in November, after a 0.9 percent decrease in October, according to a Bloomberg News survey of economists before the Commerce Department releases its report today.
“Overall U.S. data have been good and people started to expect a better economy in 2011,” said Yousuke Hosokawa, a senior currency dealer in Tokyo at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh-largest bank. “There is a possible logic that improved economic prospects leads to buying of the dollar.”
Crude oil for February delivery traded at $91.64 today after reaching $92.58 yesterday, the most expensive since Oct. 7, 2008. Canada is the biggest supplier of crude to the U.S. The Thomson Reuters/Jefferies CRB Index of 19 raw materials advanced 0.1 percent yesterday.
Canada’s Dollar
The Canadian dollar was supported on speculation a report this week may show the nation’s employers increased jobs in December for a third month, backing the case for the central bank to raise interest rates.
“Stocks and commodities are doing well,” said Kengo Suzuki, manager of the foreign bond department in Tokyo at Mizuho Securities Co. “Excessive liquidity is flowing into riskier assets.”
Employers in Canada added 20,000 jobs in December, after creating 15,200 positions in November and 3,000 in October, a Bloomberg survey of economists showed before the Jan. 7 report. The Bank of Canada was the first among Group of Seven central banks to raise interest rates since July 2008, lifting its target overnight rate to 1 percent from 0.25 percent in three successive moves starting June 1. It held rates steady at its last two meetings. The next is scheduled for Jan. 18.
Taiwan’s Dollar
Taiwan’s dollar gained for a second day as exchange data showed overseas investors bought $359.6 million more local shares than they sold yesterday, the most since Nov. 5.
Consumer prices climbed 1.75 percent in December, the fastest pace in 10 months, according to the median estimate of economists in a Bloomberg survey before a statistics bureau report tomorrow.
“Foreign money has been coming into Taiwan and Asia, for both speculative and long-term investment purposes,” said Yili Tang, head of the currency division at Shinkong Life Insurance Co. in Taipei. “The Taiwan dollar will continue to strengthen.”
Taiwan’s dollar rose to NT$29.102 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$29.080 on Dec. 30, the strongest level since October 1997.
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