Dollar on firm footing: awaits data, Fed comments

[NEW YORK] The dollar nudged up against the euro and yen on Monday, after rebounding last week following a series of comments from US Federal Reserve officials who supported the case for more interest rate hikes.

The remarks such as those from St Louis President James Bullard raised prospects of more rate hikes than the market had anticipated.

Such views helped the greenback recover from a knock earlier this month when the Fed halved its rate hike expectations to two from four this year.

A batch of US indicators this week will provide investors with a chance to gauge whether the US economy is robust enough to bear a series of rate hikes.

"The dollar's near-term performance will hinge on data, notably Friday's Japanese tankan, US non-farm payrolls and the manufacturing PMI," said Shusuke Yamada, chief Japan FX strategist at Bank of America Merrill Lynch in Tokyo.

Other US data that could impact the dollar this week include the core personal consumption expenditures price (PCE) index due later on Monday and Thursday's Chicago purchasing management index (PMI).

"Statements by the Fed's Yellen and Dudley will also be in focus. They are core Fed board members and dollar will be supported if they express hawkish views," Mr Yamada said.

Fed Chair Janet Yellen speaks on Tuesday and New York Fed President William Dudley speaks on Thursday.

The dollar was up 0.2 per cent at 113.375 yen after touching a 12-day high of 134.400.

The US currency had gained 1.4 per cent versus its safe-haven Japanese peer last week, pulling away from a 17-month low of 110.67 plumbed mid-month.

The euro inched down 0.1 per cent to US$1.1160 following a loss of 0.9 per cent last week.

The dollar index, which gained roughly 1.3 per cent last week, touched 96.368, its highest since March 16.

The Australian dollar was steady at US$0.7506 having lost 1.4 per cent last week and knocked away from an eight-month high of US$0.7681 as commodity prices slid sharply from their recent peaks.

REUTERS