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TOKYO: The dollar was mixed against other major
currencies in Asian trade on Wednesday amid growing speculation that
the US Federal Reserve may hike interest rates to fight inflation,
dealers said.
They said the market was looking
ahead to a meeting of Group of Eight finance ministers this weekend,
with signs that Washington is seeking to bolster the greenback.
The dollar edged up to 107.48 yen
in Tokyo afternoon trade, compared with 107.38 in New York late
Tuesday.
The euro rose to 1.5509 dollars
after 1.5464 and to 166.69 yen from 166.19 yen.
The market was weighing signals
from US officials in support of a strong dollar, said Hachijuni Bank
forex dealer Sho Komamura.
“We believe it’s just verbal
intervention,” he said, but added that the remarks still warranted
caution.
“The dollar could rise to
around 108 yen in the near future,” he said.
Federal Reserve chairman Ben
Bernanke has toughened his message on inflation, adding to
speculation that the US central bank may hike interest rates later
this year.
US Treasury Secretary Henry
Paulson this week said the sound health of the world’s largest
economy would be reflected in the value of the dollar, but did not
rule out intervention in the currency market to shore up the
greenback.
Analysts said US officials
appeared to be trying to talk up the dollar’s value in a bid to
cool import inflation, with the chances of actual currency market
intervention to buy the greenback still seen as limited.
Traders were looking ahead to the
meeting of finance ministers from the G8 industrialized nations on
Friday and Saturday in Osaka. But with central bank governors
absent, currencies may not be a major area of focus.
They said European officials
might want to avoid a sharp appreciation of the dollar against the
euro in any case because it would add to inflation worries in the
Eurozone.
The greenback has fallen by
around 15 percent against the euro and over 12 percent against the
yen in the past year.
Aggressive rate cuts by the Fed
in recent months to bolster economic growth have weighed on the US
currency.
--AFP
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