Dollar Nears 7-Year High to Yen on U.S.; Gold, Ruble Drop

Pedestrians walk down Beale Street at dusk in downtown Memphis, Tennessee. U.S. data last week showed the world’s largest economy grew an annualized 3.5 percent in the third quarter, exceeding estimates. The dollar jumped to an almost seven-year high versus the yen and gold fell with oil as slowing Chinese manufacturing growth and the Bank of Japan’s unexpected stimulus highlighted diverging growth outlooks for the U.S., Asiaand Europe. The ruble fell and natural gas futures gained. The Bloomberg Dollar Spot Index advanced 0.2 percent by 7:14 a.m. in London, heading for a level last seen in June 2010 as the greenback bought 112.69 yen, the most since December 2007. The euro was near a two-year low and gold fell 0.2 percent to $1,170.31 an ounce in the spot market. West Texas Intermediate crude dropped 0.4 percent and gas futures surged 3.8 percent on forecasts for cold U.S. weather. U.S. and European equity-index futures were little changed. Russia’s currency slid 0.8 percent. Most major currencies were weaker against the dollar today after U.S. consumer-confidence and manufacturing reports Oct. 31 underscored the strength of the world’s biggest economy relative to the outlooks in Europe and Asia. An official gauge of Chinese factory output unexpectedly dropped in October, data at the weekend showed, while a private gauge today was unchanged from September. Japan’s markets are closed for a holiday after the country’s central bank surprised investors by increasing its unprecedented monetary easing program. “The dollar’s strength will continue to persist given the widening interest-rate outlooks between the U.S., Japanand Eurozone,” Audrey Goh, a Singapore-based investment strategist at Standard Chartered Plc, said by phone. “Growth momentum in the U.S. has been quite robust. Europe, on the other hand, is continuing to see weakening economic data. That will pressure the ECB to do more easing, following the BOJ’s move last week.” Precious Metals Gold extended declines today after sliding 2.2 percent Oct. 31 and touching $1,161.35, its lowest intraday price since July 2010. The precious metal dropped 4.7 percent last week to cap a second straight monthly loss. Silver slipped 1 percent to $16 an ounce today, after reaching $15.7908 Oct. 31, its lowest level since February 2010. Platinum fell 0.1 percent while palladium added 0.5 percent. The yen tumbled 2.9 percent Oct. 31 after the unexpected BOJ announcement, which saw five of nine BOJ board members -- including Governor Haruhiko Kuroda -- vote in favor of raising the annual target for enlarging the monetary base to 80 trillion yen ($710 billion), from a range of 60 to 70 trillion yen previously. The currency dropped as much as 0.6 percent today to 112.99 per dollar after losing 3.9 percent last week, its worst such slump since December 2009.