Euro reaches highest level vs. dollar since 2011

Record Drop

The yen rose earlier versus the dollar as investors reduced wagers it would keep falling after sliding for the past 11 weeks in the longest losing streak on record.

Japan’s currency fell 6.1 percent over the past month in the worst performance among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro gained 2 percent, while the dollar declined 0.2 percent.

The Federal Open Market Committee will issue a policy statement tomorrow after its two-day meeting. Minutes of the committee’s December session showed participants were “approximately evenly divided” between those who said it would be appropriate to end its third round of asset purchases, known as quantitative easing or QE3, around mid-2013 and those who thought the buying would need to continue beyond that.

‘Holding Pattern’

“The groundbreaking meeting was December, and they’ll be in a holding pattern through January, so I don’t think we’ll get any fresh drivers from the meeting tonight,” said Daragh Maher, a strategist in London at HSBC Holdings Plc.

The Conference Board’s index of U.S. consumer confidence decreased to 58.6, the weakest since November 2011, from a revised 66.7 in December, figures from the New York-based private research group showed today.

“From today onward, we’ll get a series of weaker data prints” from the U.S., said Kiran Kowshik, a currency strategist at BNP Paribas SA in London. “Our preference is to continue selling the dollar on rallies. We expect a minimal change in the Fed statement.”

The ADP Research Institute is scheduled to release January company hiring numbers tomorrow, followed by a government report on fourth-quarter gross domestic product.

The New Zealand dollar rose for the first time in four days against its U.S. counterpart after the statistics bureau said the annual trade deficit narrowed to NZ$1.21 billion ($1 billion) in the 12 months ended December, compared with a revised NZ$1.39 billion shortfall in the year through November.

The kiwi, as the currency is nicknamed, appreciated 0.4 percent to 83.75 U.S. cents after falling 1 percent in the previous three days.

Trading Volumes

Sterling rose for the first time in four days against the euro, appreciating 0.2 percent to 85.59 pence.

U.K. currency-trading volumes fell to an average $1.92 trillion a day in October, 5 percent lower than six months earlier, the Bank of England said, citing its twice-a-year surveys for the Foreign Exchange Joint Standing Committee.

Average currency-trading volumes in the U.S. declined to $794 billion a day in October from $860 billion in April, the Federal Reserve Bank of New York said.

Bloomberg News

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