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% against the yen to 159.58, near the psychologically important 160-per-dollar level.
1. Dollar gains on rate bets
The dollar held near a one-month high against major peers in early Asian trading, supported by expectations of further Federal Reserve tightening after stronger-than-expected October inflation data and hawkish remarks from US central bank officials. Officials left open the possibility of a 50-basis-point increase, while some major brokerages, including Goldman Sachs, expected another hike early next year in addition to one in December.
2. Yen nears 160 per dollar
The dollar eased 0.12% against the yen to 159.58 but remained supported by wide interest-rate differentials. A Bank of Japan board member was due to speak later Thursday; an analyst at MUFG Bank said a cautious stance on another rate increase could bring the divergence between Japanese and US policy into focus. Japanese wholesale prices rose 7.1% year over year in October, up from 6.8% in September.
