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Dollar holds euro gains but dips against emerging units

By Vision Reporter

Added 24th November 2015 12:35 PM

The dollar held its gains against the euro Tuesday as markets bet on a Federal Reserve rate hike next month, while emerging market currencies got a lift from optimism over the world's top economy.

Dollar holds euro gains but dips against emerging units

The dollar held its gains against the euro Tuesday as markets bet on a Federal Reserve rate hike next month, while emerging market currencies got a lift from optimism over the world's top economy.

The dollar held its gains against the euro Tuesday as markets bet on a Federal Reserve rate hike next month, while emerging market currencies got a lift from optimism over the world's top economy.

Dealers are awaiting fresh economic data, including third-quarter US growth later Tuesday, looking for the latest clues about the direction of Fed policy.

The greenback has rallied against its major peers on the prospect of a small increase in borrowing costs in December, a prospect boosted by comments from Fed officials including its chief Janet Yellen.

In a letter Monday to consumer advocate Ralph Nader defending the Fed's near-zero rate policy, Yellen said more upbeat data would mean that "it will be appropriate to begin to normalise interest rates".

In Tokyo, the euro edged down to $1.0633 from $1.0636 Monday in New York, while it also slipped to 130.52 yen from 130.64 yen.

Washington's revised estimate of third-quarter growth is expected to be lifted to 2.0 percent from 1.5 percent.

"The rhetoric from the Fed suggests numbers would have to fall off a cliff to stop an interest-rate rise in December," Michael McCarthy, chief markets strategist in Sydney at CMC Markets, told Bloomberg News.

A rate rise would tend to lift the dollar.

However, the US unit struggled against higher-yielding, or riskier, emerging currencies, with Malaysia's ringgit jumping nearly one percent on the back of higher crude prices. Oil is a key export for Malaysia.

The South Korean won added 0.44 percent and the Taiwan dollar was up 0.27 percent, while the Indonesian rupiah, Singapore dollar and Thai baht were also up.

The dollar weakened to 122.73 yen from 122.83 yen Monday in New York.

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