Dollar Gains to 6-Month High on December Taper Bet

The dollar rose to a six-month high against the yen as an unexpected drop in U.S. jobless claims and a rise in leading economic indicators added to speculation the Federal Reserve may start reducing stimulus next month.

The euro strengthened to a four-year high against the yen as German lawmakers reached a coalition accord on wages and spending increases without raising taxes, spurring demand for the region’s assets. The Thai baht fell after the central bank cut interest rates,

while the Canadian dollar dropped as crude oil slipped for a fourth day. “The dollar is benefiting from a very small risk of taper in December,” Omer Esiner, chief market analyst in Washington at the currency brokerage Commonwealth Foreign Exchange Inc., said in a phone interview. “I’m still a little skeptical about December tapering. Granted the FOMC meeting minutes was a bit more hawkish than expected, but if you just focus on what Bernanke and Yellen said, the most likely scenario is taper in the first quarter.”

The dollar gained 0.9 percent to 102.16 yen at 5 p.m. in New York and touched 102.19, the strongest level since May 29. It slipped 0.1 percent to $1.3579 against the common currency, having dropped as much as 0.3 percent earlier. The euro advanced 0.9 percent to 138.73 yen after touching 138.79, the highest since June 2009.

The Bloomberg U.S. Dollar Index, which tracks the currency against 10 major counterparts, rose 0.3 percent to 1,021.55.


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