Dollar in pole position as Fed minutes keep June rate hike alive | Reuters

TOKYO The dollar stood tall in early Asian trading on Thursday, after racing to multi-week highs when the minutes of the U.S. Federal Reserve's latest policy meeting rekindled expectations for a June interest rate hike.

The dollar soared as high as 110.25 yen JPY= overnight, its strongest since April 28, the last time it traded above 110. It was last at 110.10 yen, down 0.1 percent.

The euro fetched $1.12220, up 0.1 percent, after falling as low as $1.12145 EUR= on Wednesday, its weakest since March 29.

The dollar index, which tracks the greenback against a basket of six major currencies, was up 0.1 percent in early Asian trading at 95.161 .DXY after rising as high as 95.270 overnight.

The Fed minutes showed that most policymakers were leaning towards tightening if economic data pointed to stronger second-quarter growth, as well as firming inflation and employment.

CME fed fund futures showed that the probability of a June rate increase by the Fed rose to 34 percent after the release of the FOMC minutes on Wednesday from 19 percent earlier in the day, 15 percent on Tuesday, and less than 1.0 percent a month ago, according to CME group's FedWatch.

"With April activity indicators consistent with a healthy bounce-back in growth, we see risks of two rate hikes in 2016, with the first coming in the June/July time horizon," strategists at Barclays said.

Data earlier this week showed U.S. inflation rose by the most in three years in April while industrial output and housing starts both rebounded, suggesting the economy was regaining steam at the start of the second quarter after almost stalling early in the year.

The dollar's rebound against the yen no doubt came as a relief to Japanese officials, who were concerned that its recent strength would stifle Japan's nascent economic recovery.

Currency stability is likely to be a topic at the G7 finance leaders' meeting in Sendai, northern Japan on Friday and Saturday. The meeting could expose a rift on issues ranging from currency and fiscal policies within the group of advanced economies.

(Editing by Shri Navaratnam)

This story has not been edited by Firstpost staff and is generated by auto-feed.


Updated Date: May 19, 2016 06:15 AM

Also Watch

Watch: The true stories from Dharavi that inspired Rajinikanth's Kaala
  • Thursday, March 8, 2018 Watch: Cyrus Khan talks about Parkour, jumping across walls and why he hates sitting
  • Thursday, May 31, 2018 Unwind: India's basketball sensation Amjyot Singh has his eyes set on becoming an NBA regular
  • Monday, May 28, 2018 First Day First Showsha — Review of Solo: A Star Wars Story in 10 questions
  • Saturday, May 19, 2018 Social Media Star: Rajkummar Rao and Bhuvan Bam open up about selfie culture, online trolls

Also See