The dollar rose to a three-month high against the yen and climbed
versus the euro after Federal Reserve Chairman Ben S. Bernanke said
economic risks have faded, spurring traders to boost wagers interest
rates will rise.
Bernanke said late yesterday that the central bank will ``strongly
resist'' any waning of public confidence in stable prices. ``Strong''
economic fundamentals will translate to dollar strength, Treasury
Secretary Henry Paulson said today in a Bloomberg Television interview
in Washington.
``The Fed and the Treasury have signaled what they want: a stronger
dollar,'' said Jeff Gladstein, global head of foreign- exchange trading
at AIG Financial Products in Wilton, Connecticut. ``There's potential
for dollar appreciation.''
The dollar rose to 107.14 yen, the highest since Feb. 27, at 10:29 a.m.
in New York, from 106.31 yesterday. Against the euro, the dollar
climbed to $1.5509, from $1.5646. Japan's currency traded at 165.88 per
euro from 166.33 yesterday.
Futures on the Chicago Board of Trade show a 55 percent chance the Fed
will raise its 2 percent target rate for overnight lending between
banks by at least a quarter point at its Aug. 5 meeting, compared with
9 percent the previous day. The contracts show a 95 percent chance the
Fed will increase the rate by December, up from 67 percent odds a week
ago.