Dec 20 2013
Dollar Rises to 2-Month High Versus Yen on Fed Bets
The dollar climbed 0.9 percent to 104.10 yen this week in New York, and reached 104.64, the highest since October 2008. It was the longest period of five-day gains since Feb. 1. The euro fell 0.5 percent to $1.3673, the first drop in six week. Japan’s currency fell 0.3 percent to 142.32 per euro.
“The mechanics of the dollar story are changing -- the normalization of the U.S. growth story is getting attractive for global investors,” Sebastien Galy, a New York-based senior foreign-exchange strategist at Societe Generale SA, said on Bloomberg Radio’s “Bloomberg - The First Word” with Bob Moon. “Investors are moving back their money to the dollar after years of selling the dollar. It’s a systemic shift that’s happening.”
The dollar rose against the yen for an eighth week, the longest streak since February, after Federal Reserve officials voted to reduce monetary stimulus amid signs that economic growth is gaining momentum.
The U.S. currency gained versus 14 of its 16 major peers after the central bank said it plans to cut its monthly bond purchases to $75 billion from $85 billion, taking its first step in unwinding the unprecedented program. The pound rallied on speculation the Bank of England will need to raise interest rates sooner than planned. Brazil’s real fell after the central bank said it’ll pare intervention that has supported the currency.
Rate Range Projection by Bank
Next week 102.50 - 105.00
Next 3 months 100.00 - 107.00
FOMC decided to reduce the size of QE which the market prediction was not. So US$ will be taking strong position against JPY.