Dollar Holds Gain Before Jobs Report as Asian Stocks Rise

(Bloomberg) — The dollar headed for its biggest weekly advance against major peers since January before data on the U.S. jobs market. Asian stocks rose and oil in New York climbed.

The Bloomberg Dollar Spot Index is up 1.1 percent this week, with the greenback near an 11-year high to the euro at 7:19 a.m. in London. Standard & Poor’s 500 Index and Euro Stoxx 50 Index futures were little changed. The MSCI Asia Pacific Index added 0.7 percent, leaving it little changed for the week, while Japan’s Topix index closed at a more-than seven-year high. U.S. oil has gained 2.3 percent this week.

A gauge of global equities is less than 1 percent from an intraday record struck Feb. 26 after the European Central Bank clarified a plan for buying 60 billion euro ($ 66 billion) of assets a month from Monday. Friday’s payrolls report may offer clues to the timing of U.S. rate increases, after new claims for jobless benefits rose to a nine-month high. Diverging outlooks of the U.S. and other countries have seen the dollar rise against most global peers this year.

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“The euro’s sharp plunge is elevating the dollar,” Takeru Kurokawa, an analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services, wrote in a note to clients. “Payrolls within expectations should be dollar supportive.”

Bond Buying

The euro was 0.1 percent weaker at $ 1.1016 after touching $ 1.0988 Thursday, its weakest intraday level since September 2003. The currency is headed for a weekly loss of 1.6 percent, also its third straight retreat. European stocks surged Thursday, with Germany’s DAX Index climbing to a record.

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The ECB will buy assets “in any case until we see a sustained adjustment in the path of inflation” toward the bank’s aim, Draghi told reporters on Thursday. The purchases will include securities with negative yields up to the bank’s deposit rate of minus 0.2 percent.

ECB officials also revised higher projections for economic growth, partly due to a drop in oil prices, and expect gross domestic product to expand 1.5 percent this year, 1.9 percent in 2016 and 2.1 percent in 2017.

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The Topix rose 1.1 percent to its highest close since December 2007. The Nikkei 225 Stock Average jumped 1.2 percent to an almost 15-year high as Uny Group Holdings Co. climbed 11 percent after FamilyMart Co., Japan’s third-largest convenience store operator, said it’s in talks with the department store chain about a possible merger.

Asian Stocks

The Kospi index in Seoul gained 0.7 percent while New Zealand’s NZX 50 Index rose 0.8 percent after reaching a record earlier in the week. Australia’s S&P/ASX 200 Index was little changed.

The Australian dollar strengthened 0.2 percent to 77.95 U.S. cents and is little changed for the week. The Aussie was about 2 percent overvalued last month and could still be considered too high, according to Reserve Bank of Australia documents.

The Hang Seng Index fluctuated in Hong Kong and a gauge of Chinese companies listed in the city was little changed after sinking more than 5 percent in the previous three trading days.

China’s yuan was little changed at 6.2647 to the greenback today and traded at its strongest versus the euro since October 2000. Europe as a bloc was China’s biggest trading partner in January. Data due Sunday may show exports swung back to growth in February, while imports dropped for a fourth straight month, according to economists surveyed by Bloomberg.

The People’s Bank of China has weakened the currency’s reference rate versus the dollar for the last four weeks in a row, the longest streak since May. The central bank cut interest rates for the second time in three months last weekend.

Russia’s ruble climbed 1.3 percent to 60.046 per dollar today.

Snowfall in parts of the U.S. may have caused some workers to have been temporarily dismissed, leading to the increase in unemployment claim filings for last week. Friday’s jobs data may show employers added 235,000 workers to nonfarm payrolls in February, while the unemployment rate is expected to drop to 5.6 percent, matching a more than six-year low.

Yen Weakness

The Fed has said it will remain patient when it comes to boosting borrowing costs, even as the economy shows signs of improvement. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed. The yen was little changed at 120.10 per dollar, headed for a third straight weekly drop.

Gold was little changed at $ 1,198.61 an ounce today, heading for its fifth decline in six weeks. A measure of 30-day historic volatility in the U.S. dollar-denominated spot price has fallen to the lowest since November. While it’s up just 1.3 percent in dollar terms this year, the yellow metal has risen 11 percent in euros, 6.1 percent in Australian dollars and 2.2 percent when priced in China’s yuan.

West Texas Intermediate crude added 0.3 percent to $ 50.89 a barrel after sliding 1.5 percent on Thursday. While WTI is up this week, Brent crude has lost 2.6 percent. The benchmark for more than half the world’s oil was 0.5 percent higher at $ 60.79 in London today.

To contact the reporters on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net; Nick Gentle in Hong Kong at ngentle2@bloomberg.net

To contact the editors responsible for this story: Nick Gentle at ngentle2@bloomberg.net Sandy Hendry

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