US dollar heads higher in holiday-shortened week

[New York] The US dollar rose on Monday at the start of a holiday-shortened week packed with economic reports expected to show improvements that could support a Federal Reserve interest rate hike next month.

Around 2200 GMT, the euro stood at US$1.0636, compared with US$1.0641 at the same time Friday. The dollar was a whisker lower against the Japanese currency at 122.83 yen.

About 90 per cent of economists expect the Federal Open Market Committee to announce a rate hike on December 16, capping a two-day monetary policy meeting, and that likelihood has already been priced into the market, said Kathy Lien of BK Asset Management.

"This shortened trading week should also be good for the dollar because most of the economic reports on the calendar are expected to highlight the recovery in the US economy," she said.

Those include the government's second estimate of third-quarter gross domestic product growth on Tuesday, expected to be revised up to 2.0 per cent from 1.5 per cent.

The Conference Board's consumer confidence reading for November was projected to jump several notches higher after a robust October jobs report.

The US markets are closed Thursday for the Thanksgiving Day holiday.

"We expect the dollar to shine leading up to the December 16 monetary policy decision and to fall once the Fed makes it clear that future rate hikes will follow a very gradual path," Ms Lien said.

AFP