TOKYO: The dollar climbed against the yen and euro in Asia as an upward revision of the United States economic growth increased the chances of another Federal Reserve interest rate hike.
The greenback suffered heavy losses earlier this month after the US central bank lowered its forecasts for tightening borrowing costs this year, citing the impact on the economy of a global slowdown and the January-February market turmoil.
But on Friday the Commerce Department said the economy grew 1.4 percent pace in the final quarter of last year, much better than the previously estimated 1 percent thanks to a surge in consumer spending and property sales.
The news reignited talk of another Fed rate rise after December’s, which was the first in almost a decade.
“We may see some hawkish sentiment creep into the (Fed’s) April statement,” Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities, told Bloomberg News. “Investors may begin to prepare for a June rate hike,” Fujito said. “The dollar has been beaten down, so right now we may be seeing moves that reverse that.”
The dollar rose to 113.62 yen from 113.08 yen in New York, while the euro dipped to $1.1156 from $1.1164.
The single currency was also at 126.75 yen from 126.30 yen.
Trading was relatively quiet with markets in Hong Kong, Australia and New Zealand closed for the Easter break.
Last week, the dollar capped its best week against the yen since November, climbing from a nine-month low reached below 111 yen, having started the month at around 114 yen.
Most emerging market currencies eased, with the South Korean won down 0.17 percent against the dollar and the Indonesian rupiah 0.62 percent lower.
The Singapore and Taiwan dollars and the Thai baht also weakened. AFP