Dollar firms to 7-month high vs yen; Fed eyed

By Satomi Noguchi

TOKYO (BestGrowthStock) – The dollar firmed to its highest in more than seven-months against the yen on Monday, extending gains after generally upbeat jobs data indicated the U.S. economic recovery is on a solid footing.

Traders said climbs in long-term Treasuries yields after the jobs report, with the benchmark 10-year yield rising to a 9-month high near the 4.0 percent mark, also boosted the dollar’s yield appeal compared to the low-yielding yen.

The yen was under broad selling pressure with euro hitting a 10-week high and the Australian dollar striking a 18-month peak in holiday-thinned early Asia trade. Markets in Australia and New Zealand are closed for holidays.

A solid rise in private-sector hiring in the jobs report has led traders to believe the Fed may raise the discount rate again on Monday when it holds a meeting, providing support to the dollar.

“The dollar looks already high enough against the yen to take profits,” said a senior trader at a Japanese bank.

“But the currency’s strength since Friday without a major corrective move down suggests that it may stay on a firm footing at least until the market sees the result of the Fed meeting today,” the trader said.

The dollar rose as high as 94.78 yen on trading platform EBS in early Asian trade, the highest since late August 2009, before trading at 94.56 yen, nearly flat from midday trading in New York on Friday.

Short-term players may test stops and options-related triggers seen at 95.00 yen during likely thin trade on Monday. Markets in the UK and many euro zone countries are also on holiday.

The U.S. stock market will reopen after closing on Friday for Good Friday holiday.

The euro was steady at $1.3493, compared to $1.3476 in midday trading hours in U.S. on Friday when it fell about 0.7 percent.

The euro was steady at 127.65 yen after reaching as high as 127.93 yen earlier on EBS, a highest since January 26.

The Australian dollar advanced as far as around 87.10 yen, according to Reuters data, the highest since late September 2008.

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(Editing by Edwina Gibbs)

Dollar firms to 7-month high vs yen; Fed eyed