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Dollar holds close to 14-month highs vs. rivals

Published 09/11/2014, 05:34 AM
Updated 09/11/2014, 05:34 AM
Dollar hovers close to 14-month peak vs. counterparts

Dollar hovers close to 14-month peak vs. counterparts

Investing.com - The dollar was still hovering close to 14-month highs against the other major currencies on Thursday, as demand for the greenback remained broadly supported by expectations for an early hike in U.S. interest rates.

USD/JPY hit fresh six year highs of 107.04 and was last up 0.08% at 106.94 as the diverging monetary policy stance between the Federal Reserve and the Japanese central bank continued to pressure the yen lower.

A study by the San Francisco Fed published on Monday indicated that Fed officials see rates rising earlier than markets expect.

The Fed is expected to cut its asset purchase program by another $10 billion next Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

The yen also remained under pressure after lackluster data on second quarter growth and the country’s current account deficit earlier in the week indicated that the economy is struggling to gain momentum and fuelled expectations for more stimulus from the Bank of Japan.

The euro held above 14-month lows against the dollar, with EUR/USD up 0.07% at 1.2926.

Sentiment on the euro remained vulnerable after the European Central Bank unexpectedly cut rates to record lows across the euro zone last week and unveiled new easing measures in a bid to shore up the faltering recovery and boost inflation.

GBP/USD added 0.15% to 1.6236, after a new opinion poll on Scottish independence on Wednesday showed that support for the no campaign was back in the lead with 53% of voters.

Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take on have sparked a broad based selloff in sterling in the past week.

Sterling also remained supported after Bank of England Governor Mark Carney indicated on Wednesday that U.K. interest rates are likely to rise in the coming months.

USD/CHF pulled away from one-year highs and slipped 0.12% to 0.9357.

AUD/USD fell 0.29% to 0.9131 even as data showed that Australia's economy added more jobs than expected last month and that the unemployment rate ticked down to 6.1%.

NZD/USD dropped to fresh 7-month lows and was last down 0.24% at 0.8175 after the Reserve Bank of New Zealand held its benchmark interest rate at 3.50% and signaled that borrowing costs will remain on hold for a longer period of time.

The bank also lowered its inflation forecasts said it expects a further depreciation in the kiwi.

Meanwhile, USD/CAD rose 0.37% to 1.0976.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady at 84.35, not far from Tuesday's 14-month peak of 84.65.

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