29.06.201304:44:17UTC+00Dollar advances as fed leaders discusses stimulus-taper decision

The dollar push greater versus the majority of its most-traded counterparts as Federal Reserve Governor Jeremy Stein said the central bank may make a decision in September about tapering financial stimulus.

Futures Positions

The difference in the number of wagers by hedge funds and other large speculators on a decline in the yen compared with those on a gain -- so-called net shorts -- was 61,462 on June 25, compared with net shorts of 61,890 a week earlier.

Reserve Balances

Reserve managers around the world held about $194 billion in Australian and Canadian currencies, according to the first IMF data on the global holdings of the two currencies.

Economic Data

The Thomson Reuters/University of Michigan said its final index of confidence eased to 84.1 this month from 84.5 at the end of May, which was the highest since July 2007. The median forecast in a Bloomberg survey of economists called for 83 in the gauge after a preliminary reading of 82.7. The MNI Chicago Report’s business barometer dropped to 51.6 this month from 58.7 in May, which was the highest in more than a year. The median forecast of 55 economists surveyed by Bloomberg was 55.

The Bloomberg U.S. Dollar Index, which tracks the dollar against 10 major currencies weighted by liquidity and trade flows, gained 0.3 percent to 1,040.48, reaching the highest level on a closing basis since May 28.

Trading in over-the-counter foreign-exchange options totaled $29 billion, compared with $29.9 billion yesterday, according to data reported by U.S. banks to the Depository Trust Clearing Corp. and tracked by Bloomberg. Volume in options on the dollar-yen exchange rate amounted to $9.4 billion, the largest share of trades at 33 percent. Euro-Dollar options were the second most actively traded, at $2.7 billion, or 9 percent.

Dollar-yen options trading was 1 percent less than the average for the past five Thursdays at a similar time in the day, according to Bloomberg analysis. Euro-Dollar options trading was 23 percent less than average.

Volatility in currencies surged since the Fed signaled last week it may start reducing stimulus this year. JPMorgan Chase & Co.’s Group of Seven Volatility Index, based on currency-option premiums, reached 11.02 percent after rising to 11.96 percent on June 24, the highest since January 2012.