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FOREX-Euro up near 1-month high after ECB rate hike talk, dollar drifts

Published 13/03/2017, 12:10 pm
FOREX-Euro up near 1-month high after ECB rate hike talk, dollar drifts
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* ECB rate talk was brief and did not receive broad support

* Fed widely expected to hike rates at policy meeting this week

TOKYO, March 13 (Reuters) - The euro edged up near a one-month high against the dollar in Asian trading on Monday, after some European Central Bank policymakers raised the possibility of hiking interest rates before bond purchases end.

The euro was up 0.1 percent at $1.0691 EUR= , after rising as high as $1.0699 on Friday, its highest level since Feb. 9.

Some members of the ECB's Governing Council discussed the possibility of higher interest rates at last week's policy meeting, but talk on the issue was brief and did not receive broad support, said two sources familiar with the discussion. gains were limited on expectations that the U.S. Federal Reserve will raise interest rates at its two-day policy meeting ending on Wednesday.

U.S. employers hired workers at a robust pace in February, beating expectations, and wages grinded higher, which could give the Fed the green light to hike interest rates despite slowing economic growth. fund futures prices showed investors pricing in more than a 90 percent chance of an increase in U.S. overnight interest rates, according to CME Group's (NASDAQ:CME) FedWatch tool.

As market participants ponder the outlook for future monetary policy moves, day-to-day trading so far this year has vexed some investors.

"It's hard to pick one specific theme in a market like this," said Bart Wakabayashi, branch manager for State Street Bank and Trust in Tokyo.

"It's hard to find trends, so I think people are mostly just playing ranges, technicals and momentum," he said.

The dollar was steady against its Japanese counterpart at 114.86 yen JPY= , below Friday's high of 115.50 yen, the highest since Jan. 19.

Speculators had boosted bullish bets on the U.S. dollar in the week through March 7, lifting net longs to their highest level since early February, according to Commodity Futures Trading Commission data released on Friday and calculations by Reuters. IMM/FX

The dollar index, which tracks the U.S. currency against a basket of six major rivals, was steady at 101.26 .DXY , above Friday's session low of 101.17, which was its lowest since Feb. 28.

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