0 Persons

Dollar hits three-week high vs yen after NY Fed president's comments

Jun 20, 2017, 5:37 AM
News ID: 16266
Dollar hits three-week high vs yen after NY Fed president's comments

EghteadOnline: The dollar hit a three-week high against the yen on Tuesday, after an influential Federal Reserve official said U.S. inflation should rise alongside wages, supporting expectations for the Fed to keep raising interest rates.

The dollar rose to 111.775 yen at one point, reaching its strongest level since May 26. That marked a gain of about 2.7 percent from the dollar's near 2-month low of 108.81 yen set last Wednesday.

The greenback last stood at 111.685 yen, up 0.2 percent on the day, according to Reuters.

The dollar was lifted on Monday when New York Fed President William Dudley said that tightening in the labour market should help drive up inflation.

That helped offset concerns among some investors that stubbornly low inflation could prevent the Fed from raising interest rates further this year.

Dudley's comments reinforced the message from last week's Fed meeting and gave a boost to the dollar, said Teppei Ino, analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore.

The dollar is now near some key technical resistance levels, including its May 24 intraday high of 112.13 yen, Ino said.

"It's sort of at a crossroads now. If it gets through these levels, that could open the way for further gains, at least from a technical perspective," he said.

Separately, Chicago Fed President Charles Evans said on Monday it may be worthwhile for the U.S. central bank to wait until year-end to decide whether to raise interest rates again.

The greenback has edged higher since the Fed raised interest rates last Wednesday and announced it would begin cutting its holdings of bonds and other securities later this year, while indicating that a recent softening in inflation was seen as transitory.

Against a basket of six major currencies, the dollar rose to as high as 97.609 at one point on Tuesday, its highest level since May 30.

The euro held steady at $1.1145, having retreated from a 7-month peak of $1.1296 set on June 14.