London, Nov. 29 (Bloomberg) -- The dollar may advance for a third week against the euro as U.S. stocks are on track for their third week of gains, boosting demand for the currency needed to buy them. ``The attention will be on U.S. equity markets and the scale of improvement,'' which will be good for the dollar today, said Ian Gunner, head of foreign-exchange research at Mellon Bank. ``There's a good chance'' the euro will be pushed lower, he said. The U.S. currency was at 99.32 cents per euro at 9:15 a.m. in London, from 99.40 late yesterday. The euro has gained almost 12 percent against the dollar this year. The dollar was at 122.46 yen, from 122.21.
Futures on the Standard & Poor's 500 Index and the Nasdaq Composite Index indicate stocks may rise today. The S&P on Wednesday had its biggest gain in six weeks. Foreign ownership of U.S. stocks is greater on a percentage basis than in Europe, meaning the dollar is more dependant than the euro on moves in equities, analysts said. In the past three weeks, the correlation between the S&P 500 and the dollar's moves against the euro was 0.81. A correlation of 1 means the two move in lockstep; a reading of minus 1 means they move in opposite directions. Reports of growth in the U.S. economy have also lifted the appeal of the dollar, analysts said. Jobless claims fell to the lowest since early last year, and U.S. consumer confidence rose in November for the first time in six months, figures this week showed. Manufacturing in the Chicago region unexpectedly expanded this month, while the U.S. economy grew more than expected in the third quarter, separate reports said. Signs of growth typically boost demand for a country's assets and the currency to buy them. German business confidence declined to a 10-month low in November. The German economy, Europe's biggest, barely expanded for a third consecutive quarter in the three months through September. The jobless rate is at a four-year high of 9.9 percent. The euro-region economy will grow at the slowest pace in nine years in 2002, the European Commission has said. France said last week its economy, the euro area's second-biggest, grew at a slower- than-expected 0.2 percent pace in the third quarter.
Confidence among businesses in the dozen countries sharing the euro probably declined in November, analysts said in advance of a European Commission survey of 25,000 companies. The report will be released at 11 a.m. London time. Trading volume may be less than usual because of the U.S. Thanksgiving holiday yesterday, traders said. U.S. stock and bond markets will close early today. In other trading, the dollar bought 1.4858 Swiss francs. The British pound fetched $1.5482, from $1.5523 late yesterday. //www.quote.bloomberg.com