Dollar climbs versus euro, yen on hints Fed done cutting rates

TOKYO - The dollar hit a three-week high against the euro and rose versus the yen Thursday in Asia, building on gains it made overnight on speculation the US Federal Reserve may raise interest rates later this year.The euro fell more than half a US cent to $1.5385 overnight — the lowest since it hit $1.5365 on May 12 — and was trading at $1.5404 midafternoon in Tokyo. The dollar climbed nearly a third of a yen to 105.52.Hawkish comments made over the past couple of days by Fed Chairman Ben Bernanke — particularly his warnings about a weak dollar Tuesday and his description of domestic inflation expectations as "a significant concern" Wednesday — have bolstered sentiment that the US central bank is done cutting rates, analysts said."Sentiment (toward the dollar) appears to be changing following a series of Bernanke comments," said Koji Fukaya, senior currency analyst at Deutsche Securities. "With (recent US) economic indicators relatively good, it's gradually getting clearer that the Fed's monetary policy stance is to push rates higher rather than lower over time."Meanwhile, the New Zealand dollar tumbled to $0.7656, well below Wednesday's closing level of $0.7798. The kiwi dove after Reserve Bank of New Zealand Governor Alan Bollard dropped hints that a rate cut could come as early as September.The US dollar rose against other major Asian currencies, trading at 44.06 Philippine pesos, 1.3683 Singapore dollars and 1,023.0 South Korean won. - AP


Source:GMANEWS.TV