Dollar stays higher in London

The dollar was holding steady near a two-month high versus the euro on Wednesday as hawkish comments from Federal Reserve officials suggested the currency would remain supported by rising US interest rates.
But it lost ground against the yen as Japanese stock prices surged and on comments from another top Bank of Japan (BoJ) official suggesting Japan was closer to ending seven years of deflation and raising its own key interest rate.
Five-year Japanese government bond yields rose to their highest since mid-2004 on the comments from the official.
"We were already getting a sense that quantitative easing would come to an end next year. The JGBs reacted more sharply than the currency," said Adarsh Sinha, forex strategist at Barclays Capital in London.
At 1138 GMT, the dollar traded steady on the day at $1.2018 per euro, compared with Tuesday's two-month high of $1.1976. It was down 0.15 percent on the day at 113.11 yen, compared with 113.50 in the previous session.
"The dollar is expected to maintain its upward momentum across the board as the latest comments from Fed officials fuel speculation that rate hikes are going to continue through to the end of the year," BNP Paribas said in a research note.
Kansas City Fed President Thomas Hoenig said late on Tuesday that the US central bank must ensure price stability after the damage wrought by hurricanes Katrina and Rita.
That echoed comments he made earlier in the week and San Francisco Fed President Janet Yellen's remarks on Tuesday that allowing an unacceptable rise in inflation was not an option, signalling the Fed's 15-month streak of rate rises would not end soon.
Federal Reserve Vice Chairman Roger Ferguson and US Treasury Secretary John Snow speak at 1400 GMT.
BoJ board member Miyako Suda said on Wednesday that the days of the central bank's "quantitative easing" policy of flooding banks with cash were numbered.
Her remarks were similar to others made recently by other top BOJ officials, and helped to lift yields in Japanese government bonds and prop up the yen.
Also supporting the yen was a jump in Tokyo share prices to four-year highs. The Nikkei share average ended trade up about 1 percent.
"There's a growing view that the Japanese economy is in better shape than previously thought and that the BoJ will end its zero interest rate policy," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp in Tokyo.
"So the yen is likely to rebound."
Traders said the yen could rise further next week, once Japanese buying of the dollar ahead of the September 30 book-closing ends.