Dollar's high is the move we've been waiting for

The dollar headed for its biggest monthly gain in more than a year as unemployment claims fell to the lowest since 2006 before a jobs report forecast to show a sixth month of 200,000-plus gains.

The U.S. currency (NYBOT:DXU14) has risen versus all of its 16 major counterparts in July as signs of a strengthening U.S. economy spurred traders to boost predictions for higher Federal Reserve interest rates. India’s rupee (CME:H3U14) weakened on concern capital inflows to emerging markets will slow as the Fed cuts bond purchases. Australia’s dollar (CME:A6U14) fell to an eight-week low after building approvals unexpectedly declined.

“The dollar is at new highs -- this is the move people have been waiting for,” said Marc Chandler, the chief currency strategist at Brown Brothers Harriman & Co. in New York. “We have stronger U.S. data, and the Fed getting closer to its mandate.”

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, rose a sixth day, adding 0.2% to 1,022.30 at 9:32 a.m. New York time. It has climbed 1.9% in July to wipe out a 1.6% first-half loss, and is set for the biggest monthly gain since May 2013.

The dollar rose 0.1% to $1.3387 per euro after appreciating to $1.3367 yesterday, the strongest since Nov. 12. Its 2.2% advance this month is the most since February 2013. The U.S. currency added 0.1% to 102.92 yen for a 10th day of gains. The euro (CME:E6U14) was little changed at 137.77 yen.

Winners, Losers

Indonesia’s rupiah rose the most this month among the dollar’s 31 major peers, adding 2.6% as Joko Widodo was elected president. No other currency gained as much as 0.5%.

Russia’s ruble (CME:R6U14) led decliners, dropping 4.6% in July amid turmoil in neighboring Ukraine. Chile’s peso fell 3.7% and the Hungarian forint slipped 3.4%.

Australia’s dollar weakened versus most of 16 major peers today after the Bureau of Statistics said building approvals fell 5% in June. Economists surveyed by Bloomberg estimated they would be unchanged.

The Aussie dropped 0.5% to 92.88 U.S. cents and slid as low as 92.79 cents, the weakest level since June 5. The currency has declined 1.6% versus the greenback in July, set for the first monthly loss since January.

India’s currency fell the most in seven weeks on speculation the conclusion of the Fed’s bond purchases will curtail demand for emerging-market assets.

The rupee fell 0.8% to 60.56 per dollar, the biggest one-day decline since June 13.

Job Growth

The dollar extended gains as the four-week average of jobless claims, considered a less volatile measure than the weekly figure, dropped to 297,250, the lowest since April 2006, from 300,750 the prior week, the Labor Department reported.

Claims in the period ended July 26 climbed to 302,000, in line with the median forecast of economists surveyed by Bloomberg, from a revised 279,000 the prior week that was the lowest since 2000.

U.S. employers added 231,000 workers in July and the jobless rate stayed at an almost six-year low of 6.1%, according to Bloomberg News surveys before tomorrow’s Labor Department data. The world’s biggest economy expanded at a 4% annualized pace last quarter, after shrinking 2.1% in the previous three months, the Commerce Department said yesterday.

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