Dollar Heads for Longest Rally Since January Before U.S. Reports

A gauge of the dollar was set for a seven-day advance, the longest climb since January, before U.S. employment data this week that could back speculation the economy is strong enough to handle higher interest rates.

The greenback remained stronger against most of its major counterparts following the completion of its biggest weekly gain since November, after some Federal Reserve officials signaled rate increases may not be far off. It rose for a seventh consecutive day against the yen Monday amid bets U.S. payrolls data on April 1 will persuade monetary authorities to widen the divergence between policy in the nation and Japan.

“The dollar will be highly sensitive to U.S. data this weak ahead of payrolls,” Takeru Kurokawa, an analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services, wrote in a note to clients. “The dollar is prone to react more to positive U.S. economic news.”

The Bloomberg Dollar Spot Index was at 1,202.80 as of 8:46 a.m. in Tokyo, compared with 1,201.29 in New York on Friday when it rose 1.3 percent for the week. The greenback added 0.3 percent to 113.45 yen and was little changed at $1.1158 against the euro.

U.S. personal income and spending, pending home sales and consumer confidence are among the data scheduled for release this week before Friday’s March jobs report, which is forecast to show a gain of 208,000, according to a Bloomberg survey of economists.

Many financial markets in Asia, Europe and North America were closed Friday for holidays and remain shut in Europe until Tuesday.

To contact the reporter on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net. To contact the editors responsible for this story: Nicholas Reynolds at nreynolds2@bloomberg.net, Naoto Hosoda, Jonathan Annells

By: Chikako Mogi

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