Azerbaijan, Baku, April 23 / Trend /
The dollar fell to a three-week low against the yen on speculation the Federal Reserve will reiterate next week its intention to keep interest rates near zero, damping the appeal of U.S. assets, Bloomberg reported.
The euro surged to a 16-month high versus the dollar in the holiday-shortened trading week as signs that the region's economy is gathering momentum fueled speculation the European Central Bank will raise interest rates further. The Australian dollar, the biggest winner this week among major counterparts to the greenback, climbed to a record as stock and commodity price gains drove investors to higher-yielding currencies.
"Market perceptions seem to be intensifying that the Fed's quantitative easing stance will continue," said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. "The bias is likely to sell the dollar."
The dollar dropped 1.5 percent to 81.88 yen yesterday from 83.13 yen on April 15, for a second weekly loss. The euro advanced to $1.4585, from $1.4430, and reached $1.4649, the highest level since December 2009. Australia's dollar rose 1.7 percent to $1.0741, from $1.0568, after climbing to $1.0775, the strongest since it was freely floated in 1983.
The euro rose 1.1 percent this week as reports showed Europe's services and manufacturing growth unexpectedly accelerated in April, suggesting the region's economy is weathering surging energy costs and austerity measures.
"The euro-zone's recovery looks solid," said Hitoshi Asaoka, senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan's second-largest bank. "As long as inflation is on the upside, market expectations for European Central Bank rate hikes will likely persist, which is euro-supportive."