US dollar up against euro, yen in Asia

March 28, 2011 | 11:30

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The greenback continued to strengthen against the euro in Asia on Monday amid calls from US Federal Reserve officials for interest rates to be normalised, analysts said.

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The euro bought $1.4057 in morning Asian trade, up from $1.4088 on Friday. The US dollar also gained against the Japanese currency, changing hands at 81.58 yen from 81.34.

The European currency traded at 114.67 yen from 114.75 yen.

Traders' confidence in the US economy was growing as the Fed reiterated its call for banks to up interest rates, analysts said.

"We've had... some relatively hawkish comments from Fed officials on Friday," said David Forrester, currency strategist for Barclays Capital in Singapore.

Higher interest rates usually support a currency as they make it a more attractive investment proposition.

A senior Fed official on Friday called for the US central bank to return monetary policy closer to its "normal" state, reinforcing faith in the dollar and the economy.

The Fed had in 2008 slashed interest rates near to zero to lessen the impact of the global financial crisis.

AFP

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