TOKYO,(Pakistan Point News - APP -22nd Augst,2016) - The Dollar rose Monday in Asian trade on renewed hopes for a possible US rate hike this year following hawkish comments from the vice chairman of the Federal Reserve. The greenback moved higher against major currencies after Stanley Fischer said Sunday that the US central bank was close to meeting its targets, outlining a bright outlook for the world's largest economy. He argued that core inflation was within "hailing distance" of the bank's two percent target while employment had increased "impressively" since its low point in early 2010.
The comments cheered investors, who are now shifting their focus to Fed boss Janet Yellen's speech this week in Jackson Hole, Wyoming, where global central bankers will congregate for an annual symposium. "Janet Yellen's speech on Friday will have the biggest impact on short-term market moves, especially if she follows in Stanley Fischer's relatively hawkish tone," Angus Nicholson, a market analyst at IG Ltd, told Bloomberg news.
"A week of talking up the US dollar will be good for US financial stocks that would benefit from a rate rise and some of that positivity could spread over into financials globally," he said. In Tokyo trade, the dollar bought 100.66 yen, rising from 100.20 Yen in New York Friday. The euro was at $1.1290, down from $1.1324 in New York. The single Currency was at 113.71, up slightly from 113.46 yen. Adding to yen weakness was an interview in Saturday's Sankei newspaper in which Bank of Japan Governor Haruhiko Kuroda said there is "sufficient chance" it will expand its monetary easing after a meeting next month as the economy stutters.
The two sets of comments highlighted the divergence of monetary policy in Japan and the United States and provided much-needed support to the dollar, which last week fell below 100 yen following disappointing US economic data. The dollar also rose 0.8 percent against the South Korean and 0.4 percent against the oil-linked Malaysian Ringgit. The Australian dollar slipped 0.4 percent, while Indonesia's rupiah sank 0.6 percent and the Thai Baht lost 0.3 percent.