US dollar firms against euro, yen on rate hike talk

[TOKYO] The US dollar rose against the yen and euro on Friday in Asia, boosted by growing speculation the Federal Reserve will lift interest rates again soon after a pick-up across world markets over the past month.

After the sharp sell-off across assets in January and February, world stock indexes have enjoyed a rally in March boosted by a series of monetary easing measures by central banks from Asia to the Americas.

That has led to several Fed policymakers to make broadly bullish statements about another rate hike - possibly next month or June - after December's rise, which was the first in almost a decade.

Among the most outspoken was the president of the St Louis bank, James Bullard, who said on Wednesday officials may be getting close to lifting rates again, provided US growth continues as forecast.

"The dollar, from a broad perspective, I think there's probably still some more room to strengthen, if the US data's good," Eric Stein, Boston-based co-director of global fixed income at Eaton Vance Corp, told Bloomberg News.

"Again, we get a dovish Fed statement that seems to lead to hawkish commentary afterwards."

The US dollar rose to 113.10 yen in Tokyo from 112.88 yen in New York, while the euro dipped to US$1.1157 from US$1.1179. The euro was also at 126.20 yen from 126.18 yen.

Trade was relatively quiet with most world markets closed on Friday for the Easter break.

The greenback is headed for its best week since November, climbing from a nine-month low reached last week.

The US unit has come under pressure since the Fed earlier this month lowered its forecasts for rate hikes this year citing volatility in global markets. It started the month at around 114 yen.

AFP