20 July 2005, 10:41  The dollar rose against the yen Wednesday morning in Asian trading

The dollar rose against the yen Wednesday morning in Asian trading as investors awaited testimony from the top U.S. monetary official amid expectations of higher U.S. interest rates, which increase the аllure of dollar assets. The dollar traded at 112.97 yen at 11 a.m. on the Tokyo foreign exchange market, up 0.37 yen from 112.60 yen late Tuesday and above the 112.68 yen it bought in New York later that day. The euro rose to $1.2084 from $1.2004 late Tuesday in Tokyo. The dollar gained against the British pound, which fell to $1.7386 from $1.7480, in late New York trade. The greenback also bought 1.2954 Swiss francs, up from 1.2937, and 1.2184 Canadian dollars from 1.2164. The dollar was supported by the 10-year U.S. Treasury note's rally above 4.2 percent Tuesday. The climb lost momentum as the 10-year yield fell to 4.19 percent after reaching a more than two-month high at 4.25 percent, said Steven Englander, chief currency strategist at Barclays Capital in New York. The 10-year yield shot higher on rising expectations of further interest rate hikes by the Federal Reserve. Investors and economists will be closely watching Federal Reserve Chairman Alan Greenspan's semiannual testimony to Congress on Wednesday and Thursday for clues about the future direction of U.S. rates. At its meeting in late June, the Federal Open Market Committee raised its overnight target rate to 3.25 percent from 3 percent. Worries about the wide U.S. trade and budget deficits propelled the euro to an all-time high of $1.3667 at the end of last year, but the dollar has since gained ground amid positive U.S. economic news and a string of interest rate increases by the Fed. In a letter Monday to Congress' Joint Economic Committee, Greenspan said high oil prices could crimp economic growth this year, but not derail it. In Washington on Tuesday, the Commerce Department reported the construction of new homes and apartments showed no change in June after analysts forecast a 1.1 percent increase. The news was seen as a possible signal the booming housing sector is finally starting to cool. Worries about the wide U.S. trade and budget deficits propelled the euro to an all-time high of $1.3667 at the end of last year. The weaker dollar helped U.S. exports by making them less expensive overseas, but had the opposite effect for European products. The dollar has since gained ground.

© 1999-2024 Forex EuroClub
All rights reserved