NEW YORK: The dollar rose against the Japanese yen on Monday, holding just below a six-month high, as investors waited on fresh signals on whether the US Federal Reserve is likely to continue hiking interest rates and watched for news that Congress will reach an agreement to raise the US debt ceiling.
The greenback has bounced for the past two weeks as stronger than expected economic reports and hawkish Fed officials keep the prospect of further interest rate increases alive.
The dollar got a mild boost after St. Louis Fed President James Bullard said on Monday that the Fed may still need to raise its benchmark interest rate by another half-point this year.
The greenback was last up 0.36% on the day at 138.43 yen, just below six-month high of 138.75 reached on Thursday.
The euro gained 0.04% to $1.0810, having hit a more than seven-week low of $1.0760 on Friday.
The dollar index, which measures the greenback against six other major currencies, was up 0.19% at 103.22, hovering below last week’s high of 103.63, a level last seen on March 20.
Investors are also focused on negotiations to raise the US debt limit, with the risk of a default seen as denting risk sentiment even as it is viewed as unlikely.
US President Joe Biden and House of Representatives Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling on Monday, after a phone call on Sunday that both sides described as positive.The Aussie fell 0.12% to $0.6644.
The New Zealand dollar rose 0.06% to $0.6280, with traders ramping up bets to 1-in-3 for a half-point hike by the Reserve Bank on Wednesday. The Chinese yuan weakened to 7.0473 per dollar in offshore trading, creeping back toward Friday’s six-month low of 7.0750.
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