Dollar Climbs on Signs of Compromise in U.S. Debt Talks

Bloomberg (11/10) --- The dollar strengthened against the yen for a third day, the longest run of gains in a month, as speculation increased that U.S. lawmakers may reach a compromise to avert an unprecedented default. The Japanese currency fell against all of its major peers as the White House endorsed a short debt-limit increase with no policy conditions attached, signaling potential support for a plan by House Republican leaders. Sweden’s krona and Norway’s krone slid as data showed inflation pressures eased in the two Nordic economics, cooling bets interest rates will have to rise. “The optimism around a potential government deal is helping to support the dollar versus the yen,” Eric Viloria, senior currency strategist at Gain Capital Group LLC in New York, said in a phone interview. “Markets are looking a bit optimistic, and you can see that with this relief rally.” The greenback climbed 0.9 percent to 98.23 yen at 4:26 p.m. New York time in the third daily gain, the longest stretch since Sept. 5. The U.S. currency touched 98.27 yen, the highest since Oct. 1. The dollar was little changed at $1.3524 per euro. The Japanese currency weakened 0.9 percent to 132.85 per euro. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major peers, touched 1,015.74, the highest since Sept. 27, before trading at 1,013.60. The JPMorgan Global FX Volatility Index fell to 8.64 percent, the least on a closing basis since May 8. The 2013 average is 9.37 percent.