Dollar rises after US growth revised up

AFP, TOKYO: The dollar climbed against the yen and euro in Asia as an upward revision of US 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 1.0 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."

 

Dollar rises after US growth revised up

AFP, TOKYO: The dollar climbed against the yen and euro in Asia as an upward revision of US 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 1.0 percent thanks to a surge in consumer spending and property sales. The news reignited talk of another Fed rate rise after Decembers, which was the first in almost a decade. We may see some hawkish sentiment creep into the (Feds) 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.