The euro rose to the maximum level this year against the yen and traded
near a two-week peak against the dollar as market increased bets the
ECB will raise rates this year.
The euro has appreciated 2.8% versus the yen and 2.3 percent against the dollar since June 5, when ECB President Jean-Claude Trichet signaled interest rates may rise next month to quell inflation.
The U.S. currency touched the lowest in almost two weeks versus the
euro after a government report June 6 showed the U.S. unemployment rate
climbed the most in two decades.
European Central Bank President Jean-Claude Trichet's
"very clear" message last Thursday has been "quite well" understood by
financial markets, ECB Governing Council member Nout Wellink said late
Friday. "Trichet's message was very clear, the markets have understood
him quite well, and he spoke for all of us on the Governing Council."
The yen fell against every major counterpart today after a government
report showed Japan's longest postwar expansion may be over.
Gains in the dollar against the yen may be limited by speculation an
U.S. industry report today will show the worst housing slump in a
quarter century is weighing on the world's biggest economy.
EUR/USDreached $1.5830/40 before rate began to consolidate under the $1.5800. Offers $1.5850, $1.5870/80, bids $1.5790.
GBP/USD rose from $1.9670 to $1.9795. Cable bids $1.9740, $1.9700. Offers $1.9790/00, $1.9830.
USD/JPY reached Y105.80 before back off to Y105.35. Offers Y105.90/00, stronger Y106.30/40.
Gains in the dollar against the yen may be limited by speculation an industry report today will show the worst housing slump in a quarter century is weighing on the U.S. economy. The National Association of Realtors at 14:00 GMT will report pending home resales fell 0.5 percent in April after a 1 percent decline in March.
Trichet will speak at a forum in Paris at 16:30 GMT