Dollar, Yen Decline as Stocks Snap Losses Before GDP Report

By Lukanyo Mnyanda

Oct. 29 (Bloomberg) -- The dollar and the yen declined as U.S. stock-index futures rose before a report that may show the world’s biggest economy exited the recession in the third quarter, stoking demand for higher-yielding currencies.

The dollar snapped four days of gains against the euro, and the yen retreated from a two-week high versus the common European currency, as investors speculated the U.S. economy probably expanded in the three months through September for the first time in more than a year. The Australian dollar recovered from the weakest level in three weeks against the U.S. currency. The Norwegian krone gained the most against the dollar after Norges Bank raised its key interest rate yesterday.

The dollar “isn’t getting too much traction ahead of the GDP number, which is one of the bigger data points to determine whether the U.S. has moved from the recession,” said Jeremy Stretch, a senior currency strategist in London at Rabobank International. “Markets are tentatively trying to put a bit of risk back on the table.”

The dollar was at $1.4743 per euro as of 8:39 a.m. in London, from $1.4706 yesterday in New York. The yen traded at 133.74 per euro, from 133.43 yesterday and 132.81 earlier, the strongest level since Oct. 14. The Japanese currency was at 90.72 per dollar, from 90.75.

Australia’s currency, or the Aussie, rose to 90.30 U.S. cents, from 89.71 cents yesterday and as weak as 89.44 cents earlier today. The krone snapped four days of losses against the dollar to trade at 5.7018, from 5.7454.

Standard & Poor’s 500 Index futures climbed as much as 0.5 percent. Europe’s Dow Jones Stoxx 600 Index added 0.1 percent after declining as much as 0.6 percent.

To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net