Dollar rallies to 8-year high on yen

[NEW YORK] The US dollar pressed to an eight-year high against the yen Tuesday on more signs that the US economy is emerging from its winter chill.

Modest improvements in US consumer confidence, home sales and prices, and orders for core industrial goods pointed to growth gathering strength in the United States.

The dollar pushed to 123.09 yen, and a one-month high of US$1.0879 against the euro.

The euro also suffered under rising worries that cash-starved Greece might not reach a deal with official creditors to avoid possible default on hits massive debts.

"Market reaction on Tuesday is more consistent with a belief Greece maybe on the cusp of default," said Jasper Lawler, a market analyst with CMC Markets UK.

Also underpinning the greenback was Federal Reserve Chair Janet Yellen's speech on Friday in which she stressed that interest rates should begin rising this year and that delaying the long-awaited move risks the economy overheating.

The same view was reiterated by Ms Yellen's deputy Stanley Fischer on Tuesday.

"Dollar bulls are back in the saddle again on the first full trading day of this holiday-shortened week as speeches from important Federal Reserve members has sparked a bit of US dollar love," said Neal Gilbert of Forex.com.

"The old saying about 'Don't Fight the Fed' is being respected."

AFP