(Bloomberg) — The dollar jumped from a four-month low on speculation that the U.S. economy will rebound from a sluggish first quarter.
The currency climbed by the most in five weeks, snapping a four-day loss against the euro, before the release of U.S. housing and manufacturing data later this week.
Improving indicators would bolster the case for the Federal Reserve to raise interest rates for the first time in more than a decade.
“There’s further to go in the positive-dollar trend,” said Ken Dickson, the Edinburgh-based investment director for currencies at Standard Life Investments Ltd., which oversees $384 billion.
“The dollar will recover” from recent losses as the Fed approaches liftoff, although gains against the euro will moderate in magnitude and pace, he said.
The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 major trading partners, rose 0.7 percent to 1,158.17 as of 12:12 p.m. in New York. It touched 1,149.06 on Friday, the lowest since January, as weaker-than-expected economic reports added to concern U.S. growth was too fragile for the Fed to increase its main rate this year.
The index has fallen for the past five weeks, its longest decline since October 2013.