Dollar hits 3- week high on official’s hawkish words

New York Fed president signals central bank’s commitment to rate hikes

The dollar began the week at a three- week high against a currency basket on Monday, after a key US Federal Reserve official reinforced the central bank’s commitment to continue raising interest rates.

The dollar index, which tracks the greenback against six major rival currencies, added 0.1 percent to 101.230 after rising as high as 101.340, reaching its highest since March 15.

New York Fed President William Dudley said the Fed might avoid raising interest rates at the same time that it begins shrinking its $ 4.5 trillion bond portfolio, prompting only a “little pause” in the central bank’s rate hike plans.

His comments bolstered US Treasury yields, added to the dollar’s appeal. The benchmark 10- year yield, which wallowed at its lowest levels since November 2016 on Friday, last stood at 2.385 percent in Asian trading, up from its US close of 2.373 percent.

“Rising interest rates in the US are supporting the dollar, I think,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

Foreign exchange markets largely shrugged off comments from St Louis Fed President James Bullard to reporters in Australia on Monday.

Bullard said the central bank could begin winding down its balance sheet sometime later this year in a shift that would make it less necessary to raise the official funds rate.

Financial markets were also watching out for developments in the Syrian civil war following last week’s US missile strike on an airbase in Syria, which had given the perceived safe- haven Japanese currency a boost.

US jobs data on Friday missed forecasts but still suggested that overall labor market strength remained intact. Jobs growth slowed sharply in March because of bad weather and as layoffs continued in the retail sector, but the unemployment rate dropped to a near 10year low of 4.5 percent.