Canada’s dollar fell for a third week as central-bank Governor Stephen Poloz’s signal that interest rates may stay lower longer contrasted with a Federal Reserve that may let borrowing costs rise by trimming its bond-buying.
For the first time in four months, foreign-exchange traders are bearish on the euro on speculation slower inflation will pressure European Central Bank President Mario Draghi to signal plans for further easing in policy.
The yen fell to a six-month low versus the dollar after reports showed manufacturing in China, Europe and the U.K. expanded last month, driving demand for risk and underscoring Japan’s currency’s role in the carry trade.
The euro weakened the most in six months versus the dollar as inflation in the region slowed more than forecast and improving U.S. economic data fueled speculation the Federal Reserve will taper stimulus in coming months. Treasuries, gold and U.S. stocks retreated.
The dollar rose from an eight-month low, while Treasuries fell and U.S. stocks closed little changed, as investors prepared for tomorrow’s employment data. The yen weakened after Japan’s exports trailed estimates, while oil slid below $100 a barrel as American inventories grew.
The dollar rose from an eight-month low amid speculation a government report tomorrow will show U.S. employment rose more than forecast, weakening the case for the Federal Reserve to put off reducing stimulus.