NEWS / Foreign Exchange

Dollar rallies vs rivals

LONDON: The dollar rallied yesterday against the euro and yen as the market focused on the prospect of further increases in US interest rates, dealers said.

The euro fell to $1.2738 in late European trading from $1.2857 late on Thursday in New York.

The dollar rose to ??111.80, from ??110.82 late on Thursday.

Against the euro, the dollar was at an eight-day high, and against the yen at an 11-day high on growing expectations that inflation concerns might prompt the US Federal Reserve to raise interest rates again in June.

Stronger-than-expected core inflation data earlier this week and hawkish comments from officials on Thursday suggested that a hike at the next meeting of US rate-setters on June 29 may be forthcoming.

This marked a change from recent speculation that the Fed would pause next month before deciding whether to raise rates further.

???The market is beginning to expect another interest rate hike in the US and this has supported the dollar,??? said Standard Chartered currency analyst Marios Maratheftis. ???In itself, another 25 basis point hike would have little impact.??? ??“ AFP