Sep 26 2014
Dollar Come Up With Longest Strength in Four Years on Policy Divergence
Rate Range Projection by Bank
Next week 108.00- 110.00
Next 3 months 105.00 - 115.00
Dollar Spot Index gained for a seventh week, the longest rally in four years, as U.S. jobs gains fueled a widening gap between the Federal Reserve moving toward higher interest rates and further stimulus in Europe and Japan. The U.S. currency climbed against all of its 16 major counterparts after data showed American employers added more workers than forecast last month and the unemployment rate fell to the lowest since 2008.
The euro fell to a two-year low as European Central Bank President Mario Draghi held interest rates at a record low. The pound slipped below $1.60 for the first time in almost a year. The yen dropped an eighth week before the Bank of Japan meets on policy Oct. 7. “The Fed’s going to like the unemployment rate,” said Roger Bayston, senior vice president and director of fixed income at the Franklin Templeton fixed-income group in San Mateo, California, in a phone interview yesterday. “With the Fed getting closer to raising rates versus the Bank of Japan and the ECB, the dollar should be much stronger versus the yen and the euro.”