Dollar at six-year high against yen

WASHINGTON: The US dollar struck a six-year high against the Japanese currency Tuesday, nearing the 110 yen level, and pushed up against the euro as well.

Buyers of dollars remained strong despite some weaker signs in the economy, including a sharp drop in consumer confidence and the stronger greenback´s mounting negative impact on commodity markets, where other countries are forced to pay higher prices.

The dollar touched 109.80 yen before pulling back to 109.64. It also moved below the $1.26 level to the euro before slipping back to $1.2631.

The euro was hit by more poor data on inflation and unemployment still stuck at 11.5 percent.
"Although the exchange rate has already declined significantly since the spring... we suspect it will drop further as the monetary policies of the Fed and the ECB continue to diverge," said Capital Economics.

"September has been a stellar month for the greenback; the dollar index has risen by 3 percent, its best monthly performance for two years," said Kathleen Brooks at Forex.com.

Brooks said the European Central Bank´s Thursday meeting, and Friday´s US jobs report for September, will be the next important signposts for the markets.

"The drop in EUR-USD to an intra-day low of $1.2570 is partly due to the market pricing in the prospect of further action at the ECB meeting later this week," she said.

As for the US economy, the jobs numbers will set a marker for how US growth is expected to go for the rest of the year.