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FOREX-Dollar near 11-month highs as upbeat US data gives rally fresh legs

Published 16/11/2016, 11:23 am
© Reuters. FOREX-Dollar near 11-month highs as upbeat US data gives rally fresh legs
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* Stronger-than-expected US retail sales data boosts dollar

* Dollar/yen near 5-month high, euro/dollar near 11-month low

* Bounce in commodity prices lifts Aussie from 1-month low

By Shinichi Saoshiro

TOKYO, Nov 16 (Reuters) - The dollar stood near an 11-month high against a basket of currencies early on Wednesday, after upbeat U.S. data gave the greenback's week-long rally fresh impetus.

The dollar index .DXY stood just below 100.26, its highest since December, touched overnight. A move above 100.51 would take the index to its highest since April 2003.

The greenback got its latest boost from stronger-than-expected U.S. October retail sales data out on Tuesday, which lifted Treasury yields and reinforced the outlook for a Federal Reserve interest rate hike in December.

The dollar was down 0.1 percent at 109.08 yen JPY= after surging to a five-month peak of 109.34 the previous day.

The euro was steady at $1.0722 EUR= , not far from an 11-month low of $1.0709 touched on Monday.

While the upbeat U.S. data helped the dollar, market focus remained squarely on the policies of President-elect Trump.

"The retail sales number lifted the dollar but the currency probably would not have felt much impact even if the data was weak. The most important factor remains what kind of policies Trump enacts," said Shin Kadota, chief Japan FX strategist at Barclays (LON:BARC) in Tokyo.

"The dollar is likely to be supported until the policies are revealed. What is key for the dollar is the overall balance of Trump's policies, as some may be viewed as negative for the economy, like tax cuts."

The dollar index has risen for the past seven sessions, hoisted by a jump in Treasury yields as Trump's victory last week led the market to think that he and a Republican-controlled Congress would embark on fiscal spending to boost the economy.

The benchmark 10-year Treasury yield US10YT=RR surged above 2 percent this week to its highest since December.

Elsewhere, the pound tended to its wounds after being hit on Tuesday as media reports refocused traders' attention on the political risks associated with Britain's departure from the European Union. GBP/

Sterling was little changed at $1.2453 GBP=D4 after losing 0.3 percent overnight.

The Australian dollar was little changed at $0.7555 AUD=D4 . The Aussie sank to a one-month low of $0.7511 on Tuesday against a broadly stronger greenback, before pulling back on a bounce in commodity prices.

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