The U.S. dollar strengthened against most major currencies in the late Asian session on Tuesday, in response to comments by St. Louis Fed President James Bullard that there is more than 50 percent chance for a Fed rate hike in September.
“I see September having a 50 per cent probability right now” for a boost in the Fed’s overnight short-term interest rate target, Bullard told Fox Business Network.
“The economy is much closer to normal today than it’s been in quite a while, certainly over the last five years,” he added.
Last week, Federal Reserve Chair Janet Yellen reiterated that U.S. interest rates will probably rise later in the year.
Data on Friday showing a pickup in U.S. consumer prices and housing starts also supported the currency.
Traders await reports on weekly jobless claims and new and existing home sales, due later in the week, for more clues about the economy.
Meanwhile, most Asian stock markets traded higher.
In Greece, the country cleared its first hurdle in the bailout crisis by repaying the money due to the International Monetary Fund and the European Central Bank with the European Commission’s EUR 7.16 billion bridge-loan, and banks in the crisis struck country opened partially despite stock exchange closure.
Monday, the U.S. dollar rose 0.03 percent against the euro, 0.25 percent against the pound, 0.31 percent against the Swiss franc and 0.12 percent against the yen.
In the late Asian session today, the U.S. dollar rose to nearly a 1-1/2-month high of 124.47 against the yen, from yesterday’s closing value of 124.17. The greenback may test resistance near the 126.00 area.
Against the euro, the greenback advanced to 1.0811 from yesterday’s closing value of 1.0823. On the upside, 1.06 is seen as the next resistance level for the greenback.
Moving away from an early low of 0.9628 against the Swiss franc, the greenback edged up to 0.9648. The greenback is likely to find resistance around the 0.98 area.
Against the Australia and the Canadian dollars, the greenback climbed to 0.7340 and 1.3011 from yesterday’s closing quotes of 0.7367 and 1.2991, respectively. If the greenback extends its uptrend, it is likely to find resistance around 0.70 against the aussie and 1.31 against the loonie.
Meanwhile, the greenback fell to 1.5581 against the pound, from an early high of 1.5554. The next possible downside target for the greenback is seen at 1.59 level.
Looking ahead, U.K. public sector finance data for June is slated for release in the European session.
In the New York session, Bank of England Governor Mark Carney is expected to speaks at the Policy Exchange Summer Reception in London.
The material has been provided by InstaForex Company – www.instaforex.com