Dollar Is Expected to Rise Against Yen, Euro as the U.S. Economy Surges Ahead
NEW YORK -- With the U.S. economy continuing to surge ahead, the dollar won't be far behind. It is only how fast it can travel this week that is in question.</br></br>Few disagree the dollar is headed higher against the yen and euro, guided by the U.S. economy's strength relative to Europe and Japan.</br></br>In fact, last Friday's higher-than-expected employment data took a lot of uncertainty out of the market over the need for a tightening of interest rates by the U.S. Federal Reserve. The figures again underlined the U.S. economy can grow at a strong pace without inflation.</br></br>While lower U.S. rates usually mean a weaker dollar as the yield on dollar-denominated deposits declines, capital flows into the U.S. currency are increasing in line with gains in the U.S. stock market, said Joe Yuska, foreign-exchange manager at Banc One International in Dallas.</br></br>"There is nothing in the horizon that will trip up the dollar," said Mr. Yuska, who expects the euro could pass last week's low of $1.0785 to test $1.0680.