The yen fell against the dollar and the euro before reports this week forecast to show consumer spending increased in the U.S. and France, sapping demand for Japan’s currency as a refuge.
The yen weakened versus all of its 16 major counterparts as signs the global economic recovery is gaining momentum boosted appetite for riskier investments.
The euro weakened for a second day against the dollar after German Chancellor Angela Merkel’s coalition was defeated in its southwestern heartland, clouding the political outlook for Europe’s biggest economy.
Japan’s currency declined to 81.80 per dollar as of 6:40 a.m. in London, the weakest level since March 18, from 81.34 in New York on March 25. The yen dropped to 114.98 per euro from 114.59. The euro slipped to $1.4055 from $1.4088, after reaching $1.4021, the least since March 18.
Consumer spending in the U.S. rose 0.5 percent in February, after increasing 0.2 percent in January, a survey of economists showed before today’s report. Personal spending in France climbed 0.5 percent in February following a 0.5 percent decrease the prior month, according to a separate survey before tomorrow’s report.
Interest-rate futures on the Chicago Board of Trade on March 25 showed a 40 percent chance the Federal Reserve will raise its benchmark rate by December, up from 35 percent a day earlier. The rate has been at a range of zero to 0.25 percent since December 2008.
The Dollar Index gained for a second day on speculation that Fed officials will signal today that the central bank will move closer to withdrawing emergency monetary stimulus.
EUR/USD: the pair bargained within the limits of $1,4020-$ 1,4070.
GBP/USD: the pair bargained within the limits of $1,6000-$ 1,6020.
USD/JPY: the pair shown high in the field of Y81,85.
US events start at 1230GMT, when personal income is expected to rise 0.4% in February, as payrolls posted a solid increase, but hourly earnings were flat and the average workweek was unchanged from January. PCE is forecast to rise 0.6%, as retail sales were up 1.0% and nonauto retail sales rose 0.7%. The core PCE price index is expected to rise 0.2%. US data continues at 1330GMT with the weekly MNI Capital Goods Index, followed at 1400GMT by Pending Home Sales for February.