Dollar firm against euro, yen as G7 finance chiefs meet

[TOKYO] The dollar was little changed Friday, holding gains against the euro while rising against the yen as a G7 finance meeting kicked off in northern Japan.

The two days of talks may highlight a sharp divide among the club of rich nations over how to rev up global growth, as host Japan seeks to win an endorsement for its position that fiscal stimulus is the way to lift global economic growth.

On Friday, investors also weighed the global economic impact of a possible US rate increase as early as June, analysts said.

Hawkish minutes from the Federal Reserve's most recent meeting, as well as solid data from the world's top economy - including last week's better-than-expected US consumer spending figures for April - have fuelled talk of another hike in interest rates.

"What we've seen over the last couple of weeks is quite a sharp recalibration of market expectations," Daniel Been, a Sydney-based currency strategist at Australia & New Zealand Banking Group, told Bloomberg News.

"Every piece of data that we get that is stable or good for the US... will be incrementally supportive of the dollar as it continues to push that pricing."

The US central bank in December lifted interest rates for the first time in almost a decade.

On Friday, the dollar climbed to 110.09 yen from 109.96 yen Thursday in New York, while holding gains from US trade against the euro.

The single currency traded flat at US$1.1203, while rising to 123.34 yen from 123.19 yen.

Among those attending the G7 meeting this week are US Treasury Secretary Jacob Lew, Fed Chair Janet Yellen, European Central Bank president Mario Draghi and IMF chief Christine Lagarde.

It comes a week before a G7 leaders' summit in Japan.

AFP