Dollar Near 6-Month High as Tapering Weighed Amid U.S. Recovery

New York (Dec 3)   The dollar was 0.2 percent from its strongest level versus the yen in more than six months as investors weigh whether signs of a strengthening economy will be enough for the Federal Reserve to reduce stimulus.

The Bloomberg U.S. Dollar Index closed yesterday at the highest in more than two months after a report showed manufacturing unexpectedly accelerated in November at the fastest pace since April 2011. A private survey tomorrow may show employers in the U.S. boosted jobs last month by the most since June, while separate figures may indicate a continued expansion in services. Australia’s dollar traded near a five-year low versus its New Zealand counterpart as the larger nation’s Reserve Bank holds a policy meeting today.

“While the U.S. data continue to print better, the dollar will be supported,” said Yuki Sakasai, a foreign-exchange strategist at Barclays Plc. in New York. “There’s a view in the market that the Fed might taper in December.”

The dollar was little changed at 102.95 yen as of 8:43 a.m. in Tokyo after touching 103.13 yesterday, the highest since May 23. It traded at $1.3539 per euro after climbing 0.4 percent to $1.3542 in New York. Europe’s shared currency bought 139.38 yen from 139.40. The Australian dollar traded at NZ$1.1126 from NZ$1.1123 yesterday, when it fell to NZ$1.1105, the weakest since 2008.

The Bloomberg U.S. Dollar Index, which tracks the currency against 10 major counterparts, was little changed at 1,023.99. It rose 0.3 percent to 1,024.07 yesterday, the highest since Sept. 13.

Payrolls, Services

The ADP Research Institute will probably say tomorrow companies in the U.S. added 170,000 positions in November, which would be the most in five months, according to the median estimate of economists surveyed by Bloomberg News.

A separate report from the Institute for Supply Management may show its non-manufacturing index will indicate continued expansion in industries that make up almost 90 percent of the world’s biggest economy.

The Federal Reserve is scheduled to release tomorrow its Beige Book business survey that provides policy makers with anecdotal accounts from the Fed districts two weeks before they meet to set monetary policy.

Officials will next gather on Dec. 17-18. They may reduce the central bank’s $85 billion in monthly bond purchases “in coming months” as the economy improves, according to minutes of their October meeting released last month.