The U.S. currency also traded near a three-week low versus the yen before government data tomorrow that may show employers in the world's biggest economy reduced staff numbers for a sixth straight month, prompting traders to pare bets the Federal Reserve will raise interest rates. The Australian dollar approached a 25-year high after retail sales grew at the fastest pace in six months, adding to speculation the central bank will increase borrowing costs.
The dollar traded at $1.5814 per euro as of 6:33 a.m. in London from $1.5793 yesterday. It touched $1.5836 on June 30, the lowest level in three weeks, and fell to a record $1.6019 on April 22. The dollar weakened to 105.91 yen from 106.13 yen. It reached a three-week low of 104.99 yen on June 30. Japan's currency was at 167.43 per euro from 167.59. The dollar may fall to $1.5830 per euro and 105.50 yen today, Ishikawa said.
The Australian dollar was the biggest gainer of the 16 most-traded currencies as a government report showed retail sales climbed 0.7 percent in May from the previous month. The currency, which touched a 25-year high of 96.68 U.S. cents on June 30, rose to 95.98 U.S. cents from 95.50 cents in New York.
ADP Employer Services said U.S. companies cut 79,000 workers in June. The U.S. lost 60,000 jobs last month, a separate Bloomberg survey showed before the Labor Department report tomorrow. The dollar weakened 1.2 percent against the euro and 1 percent versus the yen on June 6 when the government reported the U.S. lost 49,000 workers in May.
Futures on the Chicago Board of Trade showed a 25 percent chance the Fed will raise its 2 percent target rate for overnight lending between banks by a quarter-percentage point at its meeting on Aug. 5, compared with 38 percent odds a week ago.
Crude oil for August delivery rose 0.9 percent to $142.25 a barrel in after-hours trading on the New York Mercantile Exchange. The euro-dollar exchange rate and oil have moved in the same direction 90 percent of the time in the past year, according to Bloomberg calculations based on the correlation of their value changes. Oil touched a record $143.67 on June 30 as the euro reached a three-week high.
The euro may gain on speculation the European Central Bank will raise interest rates tomorrow and signal more increases are needed in the second half of the year to stem inflation.