The euro rallied to a two-month high against the dollar after European Central Bank President Mario Draghi said inflation is expected to rise gradually, damping bets policy makers will introduce further monetary stimulus.
Intervention by the Bank of Japan today may not change market fundamentals enough to weaken the yen, according to Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London.
The yen had the biggest monthly loss since January versus the dollar on speculation that the fastest Japanese inflation in 15 years will lead Prime Minister Shinzo Abe to press on with unprecedented stimulus measures.
The yen strengthened to a five-week high against the dollar as the partial shutdown of the U.S. government showed no signs of ending, fueling speculation there will be another standoff over raising the debt ceiling.
Emerging-market stocks led global equities higher as faster-than-estimated Chinese export growth bolstered optimism in the global economy. The Standard & Poor’s 500 Index and India’s benchmark gauge rose to close at record highs, while natural gas jumped on colder U.S. weather.
The dollar climbed to the strongest level in almost two weeks against the euro as investors assess Federal Reserve plans to wind down bond-buying next year amid signs that economic growth is gaining momentum.
The dollar will rise to a level against the euro last reached in September as U.S. economic growth picks up and expectations for central bank rate increases elsewhere wane, according to Bank of Tokyo-Mitsubishi UFJ Ltd.