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By Bloomberg

The dollar was 0.1 percent from a two-year high versus the euro amid speculation U.S. data today will show jobless claims were near the lowest since October, giving the Federal Reserve more reason to raise interest rates.

The greenback has advanced at least 5 percent against all its 16 major counterparts this year and extended gains yesterday after a report showed the economy grew at the fastest pace in more than a decade. The yen rose for the first time in six days against the dollar amid speculation its decline was too rapid. China’s yuan fell to a six-month low as improving U.S. economic data bolstered the dollar.

“The trend is for the dollar to rise,” said Tsutomu Soma, head of the fixed-income unit at Rakuten Securities Inc. in Tokyo. “Investors want to hold some kind of assets denominated in dollars. Emerging-market currencies may be good for short- term players, but for those looking at one- to two-year period, they are hard to aggressively buy.”

The dollar was little changed at $1.2179 per euro as of 2:38 p.m. in Tokyo after appreciating to $1.2165 yesterday, the strongest since August 2012. The U.S. currency fell 0.3 percent to 120.34 yen after rising to 120.83 yesterday, the highest since Dec. 9. The yen gained 0.2 percent to 146.55 per euro.

The dollar has surged 12 percent this year, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen declined 3.1 percent and the euro fell 1.7 percent.

Jobless Claims

U.S. initial jobless claims were 290,000 last week, versus 289,000 the previous week, which was the fewest since Oct. 31, according to a Bloomberg News survey before today’s Labor Department report. The economy grew at a 5 percent annual rate last quarter, the most since the third quarter of 2003, the Commerce Department said yesterday.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, has risen 11 percent this year, set for the biggest annual gain in data starting in December 2004.

The yen snapped its longest decline in a month versus the dollar after its 14-day relative-strength index fell to 36 yesterday, approaching the level of 30 that some traders see as a signal it has declined too far, too fast.

“Liquidity is falling with very few participants left in the market,” said Shinji Kureda, head of foreign-exchange trading at Sumitomo Mitsui Banking Corp. in Tokyo. “Dollar-yen is likely to stay in a range around the 120 level this week. We may see a test of 121.85 next week once investors come back from Christmas holidays.”

Yuan Weakens

The yuan fell for a sixth day after the People’s Bank of China cut the currency’s reference rate by 0.03 percent to 6.1247 per dollar, the weakest since Dec. 8.

“It’s basically a dollar move,” said Irene Cheung, a currency strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “In times of uncertainty, like when the U.S. is poised to raise interest rates, the fixing is actually a stability anchor.”

The yuan declined 0.05 percent to 6.2292 per dollar after dropping to 6.2325, the least since June 26.

The Australian and New Zealand dollars strengthened as a rally in Asian stocks spurred demand for higher-yielding assets.

The kiwi gained 0.3 percent to 77.32 U.S. cents and the Aussie advanced 0.1 percent to 81.16 cents.

The euro is heading for a sixth month of losses against the dollar amid speculation the European Central Bank is moving toward boosting currency-depreciating stimulus to revive growth.

“More and more people are expecting the ECB to start buying sovereign bonds,” said Masato Yanagiya, head of foreign exchange and money trading at Sumitomo Mitsui Banking Corp. in New York. “The euro will weaken especially against the dollar as a result of additional easing.”