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US dollar rises as markets await Fed chair speech
[TOKYO] The US dollar rose on Wednesday with the Federal Reserve's policy plans in focus, while the South Korean won fell after the North tested a submarine-launched missile, bringing geopolitical tensions back into focus.
Traders are awaiting a speech by Fed chief Janet Yellen at the Jackson Hole symposium of global bankers Friday hoping for clues about the direction of US monetary policy.
On Wednesday, the dollar bought 100.36 yen against 100.23 yen in New York, while the euro slipped to US$1.1295 from US$1.1307.
The greenback has been see-sawing this week as divergent views from Fed officials have kept dealers guessing about the central bank's plans.
"The US dollar appears to be in consolidation mode ahead of the key risk event for the week, Fed Chair Yellen's scheduled speech at Jackson Hole," Kymberly Martin, a currency strategist at the Bank of New Zealand, said in a commentary.
"The market has recently nudged up expectations for near-term Fed activity but still remains fairly reticent to fully price a rate hike." The dollar also rose against most Asian currencies. It put on 0.4 per cent against the won, partly in response to North Korea's missile launch early Wednesday morning, analysts said.
"The missile is one of the reasons why we're seeing a definite risk-off move in the (South) Korean won," Stephen Innes, a senior trader at OANDA Asia Pacific, told Bloomberg News.
"With emerging markets, it's about the uncertainty over the Federal Reserve. There's some expectation that interest rate hikes are going to eventually hit the market." The dollar climbed against the Malaysian ringgit, Indonesian rupiah, Thai baht, Taiwan and Singapore dollars, and the Philippine peso.
The euro advanced to 113.37 yen from 113.33 yen.
South Africa's rand rose 0.5 per cent against the dollar after diving three percent Tuesday on fears about the future of Finance Minister Pravin Gordhan, who was summoned by police over his work as Revenue Service commissioner.