The euro rose to the highest level this year against the dollar as inflation in the currency bloc exceeded analysts’ estimates, damping speculation the European Central Bank will add to monetary stimulus next week.
A gauge of major currency volatility fell to the lowest level in more than two weeks before Federal Reserve Chairman Janet Yellen gives her first monetary-policy report to Congress tomorrow as the central bank weighs the pace of the economy and additional cuts to its monthly bond-buying.
The dollar dropped against all but one peer after U.S. employers added the fewest jobs in two years in December, reducing speculation the Federal Reserve will wind down the bond-buying it uses to support economic growth.
The dollar rose to its highest level since September as data from industrial production to housing starts helped offset unemployment figures a week ago, signaling the Federal Reserve may continue reducing stimulus.
Japan’s success in building an economy that supplies the world with everything from cars to electronics is now undermining its own efforts to keep the yen from rising at a time when few countries want a strong currency.