Thursday, March 24, 2016

FOREX-Dollar on track for 1 pct weekly gain, sterling down 2.4 pct

* Bullard adds his voice to hawkish Fed chorus

* Trading volume likely thin due to Good Friday

* Sterling poised for weekly loss on 'Brexit' fears

By Lisa Twaronite

TOKYO, March 25 The dollar was on track on Friday for a weekly gain of over 1 percent against a basket of currencies after a chorus of U.S. Federal Reserve officials signalled more interest rate increases than the market had been pricing in.

The latest was St. Louis Fed President James Bullard, who said in a speech on Thursday that another U.S. interest rate hike "may not be far off" and noted labour market improvement.

"There's not a lot that will come" in terms of data before the U.S. central bank's April 26-27 policy meeting, Bullard told reporters. "I'd like to be confident that inflation expectations are stabilizing, and hopefully increasing."

This week's hawkish remarks followed the central bank's March meeting last week, in which the Fed halved its rate hike expectations to two from four for this year.

Trading globally was likely to be thin, with many key markets, including Australia, the UK and the United States, closed to observe Good Friday. Some will be closed Monday as well after Sunday's Easter holiday.

The dollar index, which tracks the greenback against a basket of six rival currencies, added about 0.1 percent to 96.213, and was poised to gain 1.1 percent for the week.

While the dollar edged down 0.1 percent against the yen to 112.83, it was still up 1.1 percent for the week and well above last week's 17-month low of 110.67 yen.

Data earlier on Friday showed that Japan's consumer inflation was flat in the year to February as low energy costs and weak consumption put a lid on price growth, keeping pressure on the Bank of Japan to add more stimulus even after easing policy less than two months ago.

The euro slipped 0.1 percent to $1.1162, below last week's one-month peak of $1.1342. It was on track to lose 0.9 percent in a week marred by attacks on Brussels for which Islamic State claimed responsibility.

The attacks added to pressure on sterling and sent it to its weakest trade-weighted basis in two years on fears that British voters would decide at a poll in June to leave the European Union.

Sterling was last down about 0.2 percent at $1.4118, down about 2.4 percent for the week.

(Editing by Kim Coghill)

FOREX-Dollar on track for 1 pct weekly gain, sterling down 2.4 pct Rating: 4.5 Posted by: Unknown


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