By Josie Cox
The dollar continued to firm against the euro Tuesday ahead of
the release of U.S. economic data later in the week that many think
will support the case for the Federal Reserve to raise interest
rates in coming months.
Having already appreciated in the previous session, the dollar
was trading 0.9% higher against the euro by midmorning, taking
gains against the single currency to well over 12% so far this year
and to over 28% over the past year.
The buck was steady against Japan's yen, at just over Yen120 and
up a little less than 0.2% against the British pound.
The dollar index, which measures the greenback's performance
against a basket of major global currencies, is on track to record
its strongest quarter since 2008, according to Lee Hardman, a
currency economist at Bank of Tokyo-Mitsubishi UFJ.
"Strengthening cyclical momentum for the U.S. economy should
provide additional support for a stronger U.S. dollar in the coming
quarter," he said.
Currency strategists at BNP Paribas said they expect the Chicago
Purchasing Managers Index and the U.S. consumer confidence index,
both due later in the day, to "reverse some of their unexpected
large declines reported for February," which could add to the
dollar's strength. Others pointed to Friday's nonfarm payrolls
figure as a likely trigger for further strength in the buck.
The weaker euro against the dollar helped to support European
shares for a second consecutive session Tuesday, putting some
indexes on track for their strongest quarter in years.
The Stoxx Europe 600 rose 0.2% by midmorning.
Germany's DAX waned 0.1%, but it has appreciated more than 22%
so far this year, putting it on track to record its strongest
quarter in almost 12 years. France's CAC, rose 0.2% in early trade,
marking a more than 19% gain so far in 2015. The quarter that ends
Tuesday is likely to be its strongest since 2009.
The notable underperformer in equity markets over the last three
months has been Greece's Athex Composite index, which has suffered
amid tensions between the country and its international creditors
over bailout funds.
Officials from Athens were in Brussels over the weekend to
present proposals to the European Commission, the European Central
Bank and the International Monetary Fund but eurozone officials
said that the proposals lacked detail.
Senior eurozone finance officials are due to hold a
teleconference on Wednesday to discuss the situation, officials
said.
The Athex rose by slightly more than 2% Tuesday but remains
close to 6% lower so far this year and down more than 40% over the
last 12 months.
In commodity markets Tuesday, Brent crude declined 1.3% to
$55.56 a barrel, while gold lost just under 0.3% to $1,181.60 a
troy ounce. The S&P 500 was indicated opening 0.3% lower.
Futures, however, don't necessarily mirror moves after the opening
bell.
Write to Josie Cox at josie.cox@wsj.com
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