The pound rose the most in two months as the International Monetary Fund raised its U.K. growth forecast and industrial output expanded, stoking bets the Bank of England will hasten interest-rate increases.
The yen increased to its strongest level in almost a month versus the dollar after Russia took control of Crimea, intensifying concern of a conflict with Ukraine’s government and boosting demand for haven assets.
The yen climbed the most in three weeks against the dollar as reports that Russian President Vladimir Putin put fighter jets on combat alert amid rising tensions in Ukraine boosted demand for less-risky assets.
The euro fell for a second day against the dollar as weaker-than-forecast factory output in the region in December prompted speculation that the European Central Bank may consider further monetary stimulus.
The yen will weaken to 100 against the dollar, a level last seen in April 2009, as growth prospects in the U.S. outpace those in Japan, according to Richard Franulovich , a senior currency strategist at Westpac Banking Corp. in New York.
The euro advanced the most in almost four weeks against the dollar as a measure of manufacturing in the region rose to the highest in more than 2 1/2 years, boosting optimism that growth in Europe is gathering pace.