Dollar nears 7-year high vs Yen on U.S; Gold Slides

The Bloomberg Dollar Spot Index advanced 0.4 percent by 10:08 a.m. in Hong Kong, heading for a level last seen in June 2010 as the greenback bought 112.70 yen, the most since December 2007. Gold fell 0.5 percent to $1,167.16 an ounce in the spot marketas silver sank 1.7 percent. The won slid 0.7 percent as the yen's slump heightened intervention speculation. Standard & Poor's 500 Index futures slipped 0.1 percent asAsia's benchmark share index slid 0.5 percent. Most major currencies were weaker against the dollar today after U.S. consumer-confidence and manufacturing reports Oct. 31 underscored the strength of the world's biggest economy relative to the outlooks in Europe and Asia. An official gauge of Chinese factory output unexpectedly dropped in October, data at the weekend showed, while a private gauge today was unchanged from September. Japan's markets are closed for a holiday after the country's central bank surprised investors by increasing its unprecedented monetary easing program. "Markets were transfixed by the risks surrounding the end of the U.S.'s long-term asset program and were ignoring the other central banks out there," Robert Rennie, the head of currency and commodity strategy at Westpac Banking Corp. in Sydney, said by phone today. "From a haven point of view markets will quite rightly put that concern to one side for the moment." Precious Metals Gold extended declines today after sliding 2.2 percent Oct. 31 and touching $1,161.35, its lowest intraday price since July 2010. The precious metal dropped 4.7 percent last week to cap a second straight monthly loss. Silver slipped to $15.8835 an ounce today, after reaching $15.7908 Oct. 31, its lowest level since February 2010. Platinum fell 0.6 percent while palladium was little changed. The yen tumbled 2.9 percent Oct. 31 after the unexpected BOJ announcement, which saw five of nine BOJ board members -- including Governor Haruhiko Kuroda -- vote in favor of raising the annual target for enlarging the monetary base to 80 trillion yen ($710 billion), from a range of 60 to 70 trillion yen previously. The currency dropped as much as 0.6 percent today to 112.99 per dollar after losing 3.9 percent last week, its worst five-day slump since December 2009. Franc, Euro "The more you look at both the strengthening U.S. data and what the BOJ has done the more you think that the yen has further to go," Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd., said by phone from Auckland. The won, which traded at 1,075.75 per dollar, is heading for its biggest three-day drop since June last year. The BOJ's expansion of stimulus came earlier than market expectations and South Koreawill closely monitor its impact on the economy, Bank of Korea Governor Lee Ju Yeol told reporters inSeoul today. The Swiss franc and the euro retreated 0.4 percent today. The European Central Bank, which meets this week, is also expanding its stimulus efforts, cutting interest rates twice since June and starting asset purchases and a targeted loan plan for banks. Inflation in the 18-nation region accelerated from a five-year low in October, data Oct. 31 showed. Data last week in the U.S. showed the world's largest economy grew an annualized 3.5 percent in the third quarter, beating the 3 percent increase in gross domestic product predicted by economists. Fewer Americans filed applications for unemployment benefits in the past month than at any time in more than 14 years, a separate report Oct. 30 showed. The Fed cited improvement in the U.S. labor market as one of its reasons for ending quantitative easing in October.