The euro headed for its biggest weekly advance in two months against the dollar before a regional report that economists said will show consumer confidence improved in September.
The shared currency was about 0.3% from the strongest since 2009 versus the yen amid optimism the 17-nation bloc is recovering. New Zealand’s dollar rose for a fifth day after the central bank said last week higher interest rates will probably be needed. Norway’s krone slid after the Norges Bank left borrowing costs unchanged yesterday. A gauge of Asian currencies was set for the biggest weekly gain in a year after U.S. policy makers this week refrained from cutting stimulus.
“What we have right now is certainly the dollar on the back foot after the Fed’s decision but over the past few months the euro has had a little more gumption of its own,” said Jane Foley, senior currency strategist at Rabobank International in London. “This is in part a perception that the crisis is off the boil. It’s also a reflection of the very good current account position of the euro zone.”
The euro rose 0.1% to $1.3538 at 7:25 a.m. New York time after climbing to $1.3569 yesterday, the highest level since Feb. 7. The single currency was little changed at 134.57 yen after rising to 134.95 yesterday, the strongest since November 2009. The yen was little changed at 99.41 per dollar.
The euro has gained 1.85% versus the dollar this week, the most since the period ended July 12.
An index of household confidence in the euro area climbed to minus 14.5 in September, the most since July 2011, from minus 15.6 in August, according to a Bloomberg survey before today’s European Commission report. Markit Economics will say Sept. 23 its gauges of manufacturing and services activity based on a survey of purchasing managers rose both expanded this month, separate Bloomberg surveys showed.
European Central Bank President Mario Draghi will address the European Parliament on Sept. 23. He has refrained from printing euros to buy bonds, contrasting with the Federal Reserve, which decided to maintain monthly asset purchases at $85 billion at a two-day meeting ended Sept. 18. Economists surveyed by Bloomberg had forecast the U.S. central bank to reduce monthly Treasury purchases by $5 billion.
Kansas City Fed President Esther George, Minneapolis Fed President Narayana Kocherlakota, and St. Louis Fed President James Bullard will separately give speeches today. George dissented for the sixth Federal Open Market Committee meeting in a row this week, repeating that the policy risks creating financial imbalances.
“I still think there’s a chance that the Fed could taper in December,” said Junichi Ishikawa, an analyst at IG Markets Securities Ltd. in Tokyo. Chairman Ben S. Bernanke “is likely to set up a path for policy normalization before he departs from his post. Whether dollar-yen can retest the 100 level depends on economic data in the U.S.”
The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, was little changed at 1,011.13. The gauge, which closed at a seven-month low of 1,008.28 on Sept. 18, has fallen 1.2% this week.
The euro has risen 4.1% in the past six months, the second-best performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen lost 4.9%, while the dollar fell 1.1%.
Adidas AG, the world’s second-largest sporting-goods maker, reduced the low end of its profit forecast yesterday, partly because of the strength of the euro, which has caused analysts to cut profit estimates in recent weeks.
Germany will hold federal elections on Sunday. An INSA opinion poll published yesterday showed both the opposition Social Democrats and Angela Merkel’s Christian Democratic-led group will fall short of a majority with their preferred coalition partners.
The euro may weaken if the anti-euro Alliance for Germany party reaches the 5% threshold of the national vote needed to win parliamentary seats, according to Thomas Kressin, head of European foreign exchange at Pacific Investment Management Co. in Munich.
The New Zealand dollar headed for a third weekly gain, extending its advance since the Reserve Bank said on Sept. 12 that interest-rate increases may be required next year from the all-time low of 2.5% as inflation picks up.
The kiwi rose 0.2% to 83.93 U.S cents after climbing to 84.36 yesterday, the strongest since May 9. It has strengthened 3.2% this week.
Norway’s krone dropped 1% to 7.9671 per euro and declined 0.9% to 5.8855 per dollar.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, climbed 0.7% this week to 116.05, the biggest increase since the period ended Sept. 14, 2012.
Malaysia’s ringgit led the advance as the Fed’s decision fueled demand for emerging-market assets.
The ringgit strengthened 4% this week to 3.1652 per dollar, The Thai baht appreciated 2.9% to 30.966, and the Indonesian rupiah rallied 0.5% to 11,350.