TOKYO: The dollar sat at seven-month highs against the euro and stood firm against the yen Wednesday following a pick-up in US inflation, while traders await minutes from the Federal Reserve's last policy meeting for clues about its plans for interest rates.
Ongoing weakness in the eurozone and Japanese economies continues to put pressure in their central banks to increase stimulus, adding to weakness in their respective currencies.
The euro fell to $1.0634 Wednesday -- its lowest since April -- from $1.0644 in New York, while the greenback was virtually unchanged at 123.37 yen from 123.39 yen.
Data showing US inflation at 0.2 percent in October added to a string of comments out of the Fed in recent weeks hinting at a December rate hike, which would be the first since 2006.
"It looks like a big bet on the Fed finally putting its money where its mouth is," Sean Callow, a foreign-exchange strategist at Westpac Banking Corp. in Sydney, told Bloomberg News.
"It looks as though the Fed will indeed kick off its tightening cycle in December, providing a stark contrast to other major central banks and thus providing durable support for the dollar."
Emerging market currencies lost some of their previous steam against the dollar, offsetting Tuesday's gains as dealers look to investing in the United States in search of better and safer returns.
The South Korean won dropped 0.37 percent, Malaysia's ringgit lost 0.32 percent and the Singapore dollar slipped 0.14 percent. The Thai baht was 0.16 percent lower and Indonesia's rupiah fell 0.21 percent.
Comments
Comments are closed.