Dollar near one-month high as yen edges toward 160
TLT•The dollar index rose 0.63% to 102.85, its highest since October 14, as traders increased bets on Federal Reserve rate hikes. The dollar softened 0.12% to 159.58 yen, near the 160-per-dollar level.
1. Dollar gains on rate bets
The dollar held near a one-month high against major currencies, supported by expectations of further Federal Reserve rate hikes after stronger-than-expected October inflation data and hawkish remarks from US central bank officials. The dollar index rose 0.63% to 102.85. Some major brokerages, including Goldman Sachs, expect another hike early next year in addition to one in December.
2. Yen approaches 160
The dollar softened 0.12% to 159.58 yen but remained supported by wide interest-rate differentials. Bank of Japan board member Toichiro Asada was due to speak later Thursday; an MUFG Bank analyst said a cautious stance on further hikes could focus attention on the policy divergence between Japan and the United States. A Reuters poll found many analysts expect the next BOJ rate hike as soon as next month.
3. Other currencies and prices
The euro rose 0.09% to $1.1099, while sterling traded at $1.328. The Australian dollar edged down 0.03% to $0.6845 and the New Zealand dollar rose 0.04% to $0.5564. Japanese wholesale prices rose 7.1% in the year to October, up from 6.8% in September.
