The dollar headed for its biggest monthly gain versus the euro since February last year as signs the U.S. economy is strengthening spur traders to boost predictions for higher interest rates.
The U.S. currency has risen versus all except one of its 16 major counterparts in July as reports have shown gross domestic product rebounded, consumer confidence improved and durable goods orders increased. Treasury 10-year yields climbed to a two-week high yesterday, while economists predict data tomorrow will show U.S. employers added more than 200,000 jobs for a sixth month. Australia’s dollar approached an eight-week low after building approvals unexpectedly declined.
“The tide has turned in the markets after the GDP data, with long-term U.S. yields finally rising again and increasing the momentum for dollar buying,” said Naohiro Nomoto, an associate for foreign-exchange trading at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Investors have priced in a strong payrolls report.”
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