The dollar rose to a two-week high against the euro after Federal
Reserve Bank of Dallas President Richard Fisher said the central bank
will raise interest rates should consumers expect faster inflation.
The U.S. currency gained for a fourth day against the yen before a
government report today that will probably show the economy grew at a
faster pace than initially estimated last quarter. The yen fell against
the Australian dollar and was near a one-month low versus the euro as
stock gains encouraged the purchase of higher-yielding assets funded in
the Japanese currency. Should ``inflation expectations continue to
worsen, I would expect a change of course in monetary policy to occur
sooner rather than later,'' Fisher said in a speech in San Francisco.
The euro may be supported by speculation the 15 countries that share
the currency are strong enough to withstand a slowdown in the U.S.,
allowing the ECB to keep interest rates on hold to fight inflation.
A government report today will probably show unemployment in Germany
declined a 28th consecutive month to 7.8 percent in May, according to a
survey.
EUR/USD retreated from $1.5660 to $1.5605.
GBP/USD fell from $1.9820 to $1.9770.
USD/JPY firmed from Y104.60 to Y104.90.
At 0900GMT, the Eurozone
May economic sentiment index is seen edging down to 96.5. UK data sees
the 1000GMT release of the May and Q2 CBI distributive trades
survey/report.