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Dollar Hits 11-Month High Above 111.50 Yen in Tokyo Morning

Posted on: Monday, 4 July 2005, 18:00 CDT

Tokyo, July 4 (Jiji Press)--The dollar gained further ground to hit 11-month highs above 111.50 yen in Tokyo Monday morning, as solid U.S. manufacturing data released Friday bolstered expectations of higher interest rates ahead in the United States.

At noon, the greenback stood at 111.65-68 yen, up from 111.08-10 yen at 5 p.m. Friday, after climbing to 111.88 yen, a level unprecedented here since Aug. 13 last year. Its morning low was 111.48 yen.

The euro continued its decline versus the dollar and stood at 1.1905-1907 dollars at midday, down from 1.2048-2050 dollars late Friday.

The dollar kept its upward momentum against other major currencies after getting a boost in Friday's trading abroad from better-than-expected manufacturing data for June released by the U.S. Institute for Supply Management.

The data, which followed the Federal Reserve's interest rate hike on Thursday, reinforced the view that the U.S. central bank will continue its tightening operations in its coming meetings, thus to widen the interest rate gap between Japan and the United States, dealers said.

"Because of recent solid U.S. economic indicators, few players dare to sell the dollar at the moment," Gen Kawabe, manager of Chuo Mitsui Trust & Banking Co.'s Treasury Department, said.

The U.S. market is closed Monday for the Independence Day holiday, but the dollar may test its upside to top the 112-yen line in the near term, he said.

Still, a wait-and-see mood may prevail ahead of the Group of Eight summit meeting in Gleneagles, Scotland, on July 6-8, and U.S. employment data for June, due out Friday, an official of a foreign bank said.END

Source: Jiji Press English News Service

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