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By Bloomberg

A gauge of the dollar remained lower after retreating from a five-year high amid speculation the currency strengthened too rapidly and before U.S. data tomorrow forecast to show job growth slowed.

The Bloomberg Dollar Spot Index gained 10 percent in the five months through November, sending its relative strength at the end of last week above the 70 level that signals to some traders that an asset may reverse course. U.S. Treasury yields remained below this year’s averages. Australia’s dollar was near a four-year low before the Reserve Bank meets today to set policy. The yen remained stronger from yesterday after Moody’s Investors Service cut Japan’s credit rating.

“U.S. yields can’t really go up in an environment where yields aren’t rising globally, so there’s going to be profit taking on dollar positions,” said Naohiro Nomoto, an associate for currency trading at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Eventually though, the dollar will strengthen, especially against the yen and euro, because of continued monetary easing” in Japan and Europe, he said.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 trading partners, was little changed at 1,104.36 as of 10:57 a.m. in Tokyo from yesterday when it fell 0.3 percent. It closed at 1,106.90 on Nov. 28, the highest level since March 2009. The measure’s relative strength index reached 70 on Nov. 28, the most in three weeks.

The dollar traded at 118.39 yen from 118.40 yesterday, when it touched 119.14, the strongest since August 2007. The euro was little changed at $1.2469 and 147.62 yen.

U.S. Jobs

Companies in the U.S. probably added 222,000 workers last month, after increasing payrolls by 230,000 in October, according to the median estimate of economists surveyed by Bloomberg News before data from the Roseland, New Jersey-based ADP Research Institute tomorrow.

The 10-year U.S. Treasury yielded 2.23 percent, lower than this year’s average of 2.56 percent.

Moody’s downgraded Japan to A1 from Aa3, citing heightened uncertainty over the nation’s fiscal deficit-reduction goals. The yen rallied versus most of its 31 major peers.

Prime Minister Shinzo Abe officially starts his campaign today for a new mandate to pursue his economic program consisting of monetary easing, fiscal stimulus and structural reforms, before national elections Dec. 14. In an Asahi newspaper poll, 47 percent of respondents said the economy would be an important factor in their decision.

Abenomics Downgrade

“The downgrade casts doubt on Abenomics, which is the driver of yen weakness,” analysts at ANZ Bank New Zealand Ltd., including Auckland-based senior currency strategist Sam Tuck, wrote to clients in a note dated today. “The yen strengthened as the move highlights the challenges Abenomics faces.”

The Reserve Bank of Australia will hold its key interest rate at 2.5 percent today, according to the median estimate of analysts surveyed by Bloomberg.

Deutsche Bank AG changed its outlook for RBA policy, calling for a 50 basis points worth of cut in the overnight cash rate in 2015, according to e-mailed statement.

The Aussie slid 0.1 percent to 84.87 U.S. cents from yesterday, when it reached 84.17, the lowest since July 2010.