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FOREX-Dollar surges on after durable data boost

Published 24/11/2016, 07:38 pm
© Reuters.  FOREX-Dollar surges on after durable data boost
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* Dollar bypasses April 2015 highs vs euro

* Hits almost 14-year highs against basket of currencies

* At 8-month highs vs yen, records vs emerging currencies

* U.S. markets closed Thursday for Thanksgiving holiday

By Patrick Graham

LONDON, Nov 24 (Reuters) - The dollar climbed past more of last year's peaks against the euro on Thursday, with only the March 2015 high of $1.0457 standing in the way of a push towards parity that banks are again saying is on the cards.

With U.S. markets out for the Thanksgiving holiday, trade is expected to be thinner, and the dollar set a series of new landmarks in early trade in Europe, extending its surge after another strong batch of U.S. economic data on Wednesday.

The data showed new orders for U.S. manufactured capital goods rebounded last month on rising demand for machinery and equipment, while consumer sentiment rose this month. dollar hit an eight-month high against the yen and an almost 14-year high against a basket of currencies that measures its broader strength. It also notched up new record highs overnight against a raft of emerging market currencies including the rupee INR= , the lira TRY= and China's offshore yuan. CNH=D3

"Certainly today's thinner holiday trade on account of US Thanksgiving is more than capable of triggering this next downside extension," analysts from London-based currency exchange LMAX said of the euro in a morning note.

The dollar's surge is based on a belief that Donald Trump's presidency will witness a bump in inflation that will drive U.S. interest rates higher and potentially see substantial dollar capital brought home by U.S. corporates.

That would appear to play into the hands of European, Japanese and Chinese policymakers, who hope weaker currencies will help deal with their respective problems with growth.

The yen was down another 0.9 percent at 113.49 by 0814 GMT. The euro steadied at $1.0530 after hitting lows of $1.0518 while the dollar index also steadied at 101.95, just off the morning high of 102.05. .DXY

"The momentum for the weaker yen could continue through the end of the year, since we are thinking the Fed will make two or three interest rate hikes in 2017," said IHS Markit's principal economist in Tokyo, Harumi Taguchi.

U.S. 10-year Treasury yields, which have spiked on expectations that the new administration would boost debt-funded stimulus spending, topped 2.41 percent intraday on Wednesday and closed above 2.35 percent, seen as a long-term resistance level.

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