Forex View: Renewed Recovery Confidence to Bolster Euro
The dollar is expected to advance against the yen but struggle against the euro this week after encouraging U.S. jobs data renewed investors' confidence in the global economic recovery.</br></br>The main beneficiaries of that more-positive growth outlook are likely to be higher-yielding currencies such as the Australian and New Zealand dollar, which advanced Friday as investors, emboldened by the better-than-expected reading on the U.S. labor market, returned in strength to growth-sensitive assets.</br></br>The euro could also benefitat least against the dollar and the yenthough much will depend on further developments in Greece, with investors still concerned over the debt-laden nation's ability to significantly shrink its budget deficit as demanded by the European Union. The yen, the classic refuge in times of trouble, is set to decline further against the dollar.</br></br>"I think the [U.S.] dollar is going to stay pretty heavy against the euro," said Daniel Katzive, foreign-exchange strategist at Credit Suisse in New York. But against the yen, after the jobs report, "it's going to be pretty well supported," he said.</br></br>With the U.S. data calendar rather light this week, attention will continue to focus on the resolution of Greece's fiscal woes. Analysts see the euro ranging from $1.35 to $1.37, and the dollar from 89 yen to 92 yen.