The Euro Keeps Winning (Hard Knock Style)

The Dollar and Yen are sinking against the Euro as funds head for higher-yielding assets. "Risk is back on," says Bank of New York Mellon currency strategist Michael Woolfolk. The dollar -0.9% against euro; -1.2% against pound; -0.9% against Swiss franc; -2.3% against Aussie dollar; +0.8% against Yen.  Jigga, what, Jigga who?

Oct. 29 (Bloomberg) -- The dollar and yen declined the most against the euro in at least seven weeks as a government report showed the U.S. economy grew in the third quarter more than economists forecast, spurring demand for higher-yielding assets.

The U.S. and Japanese currencies slid versus most of their 16 major counterparts tracked by Bloomberg as stocks and commodities rallied and Treasuries fell. The pound rose for a fourth day against the dollar as U.K. mortgage approvals climbed to highest level in 18 months.

“Risk is back on,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp., the world’s largest custodial bank. “This was a positive report. It should be positive for the stock market and negative for the dollar.”

The dollar weakened as much as 1 percent to $1.4850 per euro, the biggest intraday drop since Sept. 8, before trading at $1.4838 at 2:06 p.m. in New York, compared with $1.4706 yesterday. The yen declined as much as 1.8 percent to 135.93 per euro, the largest intraday slide since Aug. 3, after earlier reaching 132.81, the strongest since Oct. 14. Japan’s currency weakened 0.9 percent to 91.53 per dollar, from 90.75.

Blah, blah, blah, back to Jay-Z.

U.S. gross domestic product grew at a 3.5 percent annual rate in the third quarter, after shrinking in the previous four periods, the Commerce Department reported today. The median forecast of 79 economists in a Bloomberg survey was for an increase of 3.2 percent.

The dollar fell 2.5 percent to 1.7352 Brazilian reais while the yen lost 2.7 percent to 83.67 versus the Australian dollar on speculation investors will increase carry trades, in which they borrow in the currency of a nation with low interest rates to purchase assets in another country where returns are higher.

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