By Candice Zachariahs and Mariko Ishikawa
May 17 (Bloomberg) -- The dollar was set to gain against all of its 16 major peers this week before data forecast to show improvement in the U.S. economy. The greenback traded near a six-week high against the euro before the Federal Reserve releases on May 22 minutes of its last meeting, where policy makers said they may alter the pace of monthly bond purchases.
Fed Bank of San Francisco President John Williams said yesterday the central bank may begin tapering off buying as early as this summer. The yen headed for a third weekly loss before the Bank of Japan meets next week. “Considering Williams’ comments, the risk is that the Fed minutes next week will also have a hawkish feel to it and the dollar will rise,” said Yuki Sakasai, a foreign-exchange strategist at Barclays Plc. “The U.S. economic data and comments from Fed speakers will be a focus.”
The dollar was little changed at 102.18 yen as of 8:12 a.m. in Tokyo from 102.26 yesterday, poised for a 0.6 percent rise this week. It reached 102.76 on May 15, the highest since October 2008. The U.S. currency traded at $1.2885 per euro from $1.2882 after touching $1.2843 on May 15, the strongest since April 4. It has gained 0.8 percent since May 10. The yen was at 131.65 per euro from 131.73.
The Conference Board’s index of U.S. leading indicators probably rose 0.2 percent last month, according to the median estimate of economists surveyed by Bloomberg News before the data today. The gauge of the outlook for the next three to six months fell 0.1 percent in March.
Economists in a separate Bloomberg poll expect preliminary reading on the Thomson Reuters/University of Michigan index of consumer sentiment today will show a rise to 77.9 this month from 76.4 in April. “It’s clear that the labor market has improved since September,” when the Fed began its latest round of asset purchases, the San Francisco Fed’s Williams said yesterday in a speech in Portland, Oregon. “We could reduce somewhat the pace of our securities purchases, perhaps as early as this summer” and end the program late this year. The Fed purchases $85 billion of Treasury and mortgage debt a month. The central bank has pumped up its balance sheet to exceed $3.3 trillion.