TOKYO/SYDNEY, May 28 (Reuters) - The dollar hit its highest
since December 2002 against the yen on Thursday due to
expectations that U.S. interest rates will rise later this year,
while the Australian dollar struck a six-week low following
disappointing capital expenditure data.
The greenback soared as high as 124.30 yen, and last
stood at 124.15 yen.
"Macro (Shenzhen: 000533.SZ - news) funds betting on a September Fed rate hike have
increased their long exposure to the dollar, which was the main
driving force behind the rise this week," said Yunosuke Ikeda,
head of FX strategy at Nomura Securities, which has many hedge
fund clients.
In addition, a rise in Tokyo stocks also helped to boost
risk appetite and hurt the safe-haven yen, which has been under
pressure also from the Bank of Japan's aggressive monetary
stimulus since 2013.
"Longer-term, little stands in the way of further JPY
losses," said Greg Moore, senior currency strategist at RBC (Other OTC: RBCI - news) .
But traders added that players are now wary of potential
verbal intervention by Japanese officials to steady the yen.
On Wednesday, Japanese policymakers cautioned markets
against pushing the yen down too rapidly.
Finance ministers and central bankers from the Group of
Seven industrialized nations will discuss recent foreign
exchange movements when they meet in Germany this week, a senior
Canadian official said on Monday.
Nomura's Ikeda said he doubts if the dollar/yen pair will
test the 125 yen-mark anytime soon. "I expect hedge funds will
lock in profits before next week's U.S. payroll report (due on
Friday next week)."
The dollar, however, shed some ground against the euro amid
tentative hopes that cash-strapped Greece may be nearing a deal
to secure fresh funding.
The euro bounced off a one-month low of $1.0819 to
reach $1.0911, snapping a recent string of falls.
The Greek government said on Wednesday it is starting to
draft an agreement with its euro zone partners and the
International Monetary Fund that would pave the way for aid.
However, European officials have dismissed this as wishful
thinking. German Finance Minister Wolfgang Schaeuble said he was
surprised by the upbeat tone from some Greek government
officials.
Still, the steadier euro saw the dollar index dip to
97.274, from a one-month peak of 97.775.
Among commodity currencies, the Australian dollar
skidded more than half a U.S. cent after weaker-than-expected
business investment figures fuelled expectations for more easing
by the Reserve Bank of Australia.
The Aussie fell to $0.7671 from $0.7755 before the data,
hitting its lowest level in six weeks.
The New Zealand dollar fared better after the country's
dairy co-operative Fonterra said it expected global demand for
dairy products to eventually recover.
The kiwi dollar changed hands at $0.7235, down 0.3
percent on the day.
(Editing by Simon Cameron-Moore)
Reuters by Tomo Uetake and Ian Chua
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