US rate hike speculation boosts dollar
The US dollar moved higher across the board on Monday, hitting a four-and-a-half month high against the yen, helped by expectations that US jobs data- which are due out on Friday will give the Federal Reserve more reasons to raise interest rates more agressively.
Speculative buying pushed the greenback to Y107.16 against the yen in late Asian trade, a level last seen on November 11 2004. The dollar settled back to Y106.80 by 11.00 GMT, up from Friday’s New York close of Y106.39.
The euro also moved lower against the dollar, trading at $1.2915 at 11.00 GMT, down from Friday’s New York close of $1.2956. Earlier in the session the euro had moved down to $1.2888, its lowest level since February 14. Similarly the dollar hit its highest level since February 14 against the Swiss franc, briefly trading at $1.2067, before pulling back to trade at $1.2030 by 11.00 GMT.
Sterling moved down to $1.8638 against the dollar by 11.00 GMT, having finished at $1.8696 on Friday, after hitting a low of $1.8595 earlier in the session.
Dealers said that sentiment had turned in the dollar’s favour following last week’s data showing core US consumer prices rising at their fastest rate since 2002. The Federal Reserve said that it was prepared to rise interest rates faster than the current ‘measured’ pace if inflation heats up.
All eyes therefore will be on this week’s economic news from the US that culminates in Friday’s non-farm payroll data, which is expected to show that the US economy created 220,000 in March, for signs that the economy is overheating.
Speculative buying pushed the greenback to Y107.16 against the yen in late Asian trade, a level last seen on November 11 2004. The dollar settled back to Y106.80 by 11.00 GMT, up from Friday’s New York close of Y106.39.
The euro also moved lower against the dollar, trading at $1.2915 at 11.00 GMT, down from Friday’s New York close of $1.2956. Earlier in the session the euro had moved down to $1.2888, its lowest level since February 14. Similarly the dollar hit its highest level since February 14 against the Swiss franc, briefly trading at $1.2067, before pulling back to trade at $1.2030 by 11.00 GMT.
Sterling moved down to $1.8638 against the dollar by 11.00 GMT, having finished at $1.8696 on Friday, after hitting a low of $1.8595 earlier in the session.
Dealers said that sentiment had turned in the dollar’s favour following last week’s data showing core US consumer prices rising at their fastest rate since 2002. The Federal Reserve said that it was prepared to rise interest rates faster than the current ‘measured’ pace if inflation heats up.
All eyes therefore will be on this week’s economic news from the US that culminates in Friday’s non-farm payroll data, which is expected to show that the US economy created 220,000 in March, for signs that the economy is overheating.
posted by Wise Money @ 8:35 AM
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