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U.S. dollar hits two-month high against yen

U.S. dollar hits two-month high against yen

The U.S. dollar rose to a two-month peak against the yen in Asian trade yesterday, supported by the prospect of interest rate hikes in the United States as the economy recovers, dealers said.
The dollar was quoted at 92.14 yen in Tokyo afternoon trade, up from 92.02 yen in New York on Tuesday. The euro fell to US$1.4328 from US$1.4354 while holding steady at 132.07 yen.
The dollar was bought because U.S. assets offer more attractive yields than those in Japan, said Masato Otsubo, currency analyst at Resona Bank.
Speculation has grown recently that the Federal Reserve might raise rates sooner than previously expected as the U.S. economy claws back from recession.
In contrast, the Bank of Japan is widely tipped to leave its benchmark lending rate at very low levels for some time yet as it battles renewed deflation in the world's second largest economy.
Japan's key lending rate currently stands at 0.1 percent, while the Fed has set a range of zero to 0.25 percent for its main interest rate.
The dollar "looks to end the year on a firmer note but this follows several months of pressure and unlike the rally in stocks the dollar's gains are more vulnerable to a correction," said Calyon analyst Mitul Kotecha.
Helping to push the dollar up were new figures showing that the decline in U.S. home prices had slowed and that consumer confidence had improved slightly.
Otsubo also took the view that the dollar's recent rebound may have been too rapid.
"The rise may be corrected early next year. There may be a new dip towards March" when Japanese exporters repatriate earnings for the end of the fiscal year, Otsubo said.
Against Asian currencies, the dollar slipped to 1,163.50 South Korean won from 1,171.90 on Tuesday, to 46.43 Philippine pesos from 46.53, and to 9,431 Indonesian rupiah from 9,455. It declined to NT$32.27 from NT$32.29, to 33.35 Thai baht from 33.37, and to 1.4054 Singapore dollars from 1.4071.


Updated : 2020-11-30 19:11 GMT+08:00