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FOREX-Dollar nears 13 1/2-year high, buoyed by multiple rate hike view

Published 23/11/2016, 12:02 pm
© Reuters.  FOREX-Dollar nears 13 1/2-year high, buoyed by multiple rate hike view
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* Dollar regains footing after strong U.S. housing data

* U.S. existing home sales hit more than 9-1/2 year high

SINGAPORE, Nov 23 (Reuters) - The dollar traded within sight of a 13 1/2-year peak on Wednesday, bolstered by strong U.S. housing data that further cemented expectations for a Federal Reserve rate hike in December and more tightening next year.

Against a basket of six major currencies, the dollar last stood at 100.98 .DXY . That was up from Tuesday's low of 100.65 and not too far from Friday's high of 101.48 - the highest for the dollar index since April 2003.

Data on Tuesday showed U.S. home resales rose in October to their highest level in more than 9-1/2 years, helping to support the greenback. one factor that has blunted the dollar's momentum this week is a pull-back in benchmark U.S. 10-year Treasury yields from their recent highs, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

"Bonds have settled down, and that's a reason why dollar- buying hasn't been so intense," Okagawa said.

The U.S. 10-year Treasury yield US10YT=RR stood at 2.319 percent at Tuesday's U.S. close, down from Friday's one-year high of 2.364 percent.

The greenback has gained broadly over the past couple of weeks, hoisted by expectations that the Trump administration would boost fiscal spending, in turn elevating inflation and lifting interest rates.

Against the yen, the dollar last changed hands at 111.07 yen JPY= . On Tuesday it had risen to as high as 111.36 yen, matching Monday's peak, which was the greenback's strongest level against the yen since late May.

Trading in the yen is likely to be thinner than usual on Wednesday, with Japanese markets closed for a public holiday.

The dollar's rise to the near six-month high against the yen amounted to a gain of 10 percent from its Nov.9 trough near 101 yen.

The euro last stood at $1.0631 EUR= , having set a near one-year low of $1.0569 last week.

Later on Wednesday, focus will turn to U.S. durable goods orders, as well as the minutes of the Fed's November policy meeting.

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