High-yielding currencies such as the New Zealand dollar and sterling are tumbling against the dollar as a Federal Reserve interest rate hike and signals for more tightening bolster the greenback's yield appeal. The U.S. central bank raised interest rates by 25 basis points to 3.25 percent on Thursday and hinted it would keep lifting interest rates at a "measured" pace. The dollar was sold heavily in the three years to end-2004 partly because investors borrowed cheap dollars to buy those with higher interest rates -- known as carry trades. But this landscape is changing as the U.S. economy powers ahead and the dollar graduates from funding currency to high-yielding status in its own right. Compared with nine successive rises in U.S. interest rates and the scope for more, the interest rate outlook in the rest of the world is not so rosy. For example, the market is looking for the European Central Bank to cut interest rates from the current 2 percent this year. Countries which enjoyed a strong yield advantage to the United States are starting to lose it. The Bank of England is also expected to start cutting rates from the current 4.75 percent as early as August, while investors reckon borrowing costs in New Zealand -- the highest among the industrialized countries at 6.75 percent - have peaked. The vast majority of Wall Street's top economists expect the Fed to raise interest rates again next month by 25 basis points and the key rate to reach 4 percent by the end of this year. "Given divergence from U.S. interest rates in the rest of the world the dollar continues to get support," said Benedikt Germanier, currency strategist at UBS in Zurich.