SINGAPORE — The dollar held firm near a seven-week high versus the yen on Monday, supported by recent rises in U.S. yields, while sterling took a breather after surging last week on growing expectations that the Bank of England could raise interest rates soon.
The dollar rose 0.3 percent to 111.19 yen, trading within sight of Friday’s peak at 111.33 yen, the dollar’s highest level since late July.
The dollar gained nearly 2.8 percent against the yen last week, buoyed by a rise in U.S. Treasury yields that bolstered the greenback’s appeal, and as data showing a pick up in U.S. consumer prices helped rekindle expectations that the Federal Reserve could raise interest rates again in December.
“We’ve certainly seen some adjustment on the December rate hike probabilities. I think that may carry the day at least until we get into the FOMC,” said Stephen Innes, head of trading in Asia-Pacific for Oanda, referring to this week’s Fed policy meeting.
The yen’s recent drop against other currencies, such as sterling, has had some spillover impact and lent added support to the dollar versus the yen, traders say.
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