By Ron Harui
April 10 (Bloomberg) -- The dollar rose against the euro, heading for the biggest weekly gain in three months, on speculation investors are shifting funds to U.S. securities on signs the world’s biggest economy is improving.
The dollar gained versus 15 of the 16 most-traded currencies after a government report showed the U.S. trade deficit narrowed in February to the lowest level in nine years. U.S. bank shares surged yesterday after Wells Fargo & Co., the second-biggest U.S. home lender, reported a record first-quarter profit that beat the most optimistic Wall Street estimates.
“Wells Fargo’s results augur well for U.S. banks’ earnings and point to an easing in the financial crisis,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “The dollar is likely to be bought.”
The dollar climbed to $1.3129 per euro as of 9:06 a.m. in Tokyo from $1.3169 in New York yesterday. It earlier touched $1.3090, the strongest level since March 18. The dollar rose to $1.4640 versus the pound from $1.4680, and advanced to 100.67 yen from 100.42. The yen was at 132.17 per euro from 132.24.
The greenback has risen 2.8 percent against the European currency this week, the most since the period ended Jan. 9.
Currency movements may be volatile in Asia as the Easter holiday in the region reduces liquidity, Ishikawa said.
“Wow...Wow...Wow,” Citigroup Inc. technical analysts Tom Fitzpatrick and Shyam Devani wrote in a report sent to clients yesterday. The improving trade deficit “dynamic could be extremely dollar positive.”
To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net.
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