News  

Dollar gains on September rate hike hopes

DOLLARISATIONThe dollar rose against the euro and yen on Monday as upbeat US data kept hopes for an interest rate rise as early as next month.

In Tokyo afternoon trade, the greenback bought 124.38 yen, up from 124.32 yen in New York on Friday.

The euro slipped to $1.1097 and 138.03 yen, from $1.1112 and 138.14 yen in US trading last week.

Sentiment got a lift on Friday as solid US industrial production, wholesale prices and July retail sales data all signalled the world’s top economy was strengthening.

The numbers boosted expectations the US Federal Reserve could be set to raise its key interest rate for the first time in almost a decade as early as September — a plus for the dollar.

“With a September Fed hike priced around a 50 percent probability, any developments that suggest a change in timing are being acted upon,” Sam Tuck, a senior currency strategist at ANZ Bank New Zealand, told Bloomberg News.

Calm was returning to currency markets after China spooked investors last week by devaluing the yuan and moving to a new system for calculating its daily trading reference rate.

The surprise move, followed by two days of major cuts, fanned fears of a currency war in which countries push down the value of their units to lift exports.

“The guts of the devaluation orchestrated by the People’s Bank of China… is probably behind us,” National Australia Bank said in a commentary.

“Fixation with the daily (yuan) fix threatens to quickly become ‘so last week’. We should now quickly return to fretting about the Fed.”

The dollar gained ground against other Asia-Pacific units.

The dollar rose to Sg$1.4083 from Sg$1.4025 on Friday, to 46.28 Philippine pesos from 46.25 pesos, to 35.35 Thai baht from 35.26 baht and to 1,182.00 South Korean won from 1,177.32 won.

The greenback also advanced to 65.20 Indian rupees from 65.14 rupees, to Tw$32.32 from Tw$32.20 and to 13,855 Indonesian rupiah from 13,766 rupiah.

The Australian dollar edged up to 73.75 US cents from 73.72 cents on Friday, while the yuan fetched 19.44 yen against 19.43 yen.

Receive News Alerts on Whatsapp: +2348136370421


No Comments yet

Related