Dollar Steady Amid More Rate Hike Chatter

May 20, 2014

New York (May 20)   The dollar sustained recent gains versus the euro but stayed near its lowest since February against the yen amid mounting losses for US equities.

Meanwhile, prospects for stimulus from the European Central Bank have weakened the euro for the past two weeks.

Hawkish remarks from Philadelphia Fed Chair Charles Plosser gave the dollar a lift in afternoon dealing.

Plosser predicts the US recovery will pick up in the second of 2014 and into next year, prompting the Fed to "begin raising interest rates sooner rather than later."

Plosser sees unemployment dwindling below 5.9% by the end of this year.

The dollar rose to USD1.3680 versus the euro after mixed economic data from the euro zone.

German producer prices fell more than expected in April, primarily due to a sharp decline in energy prices, the statistics office Destatis said today.

The buck was fractionally higher at USD1.6840 versus the sterling. Traders shrugged off data showing UK house prices rose by 8% in the year to the end of March.

Modest losses took the dollar to Y102.20 versus the yen, within a hair of yesterday's 4-month low of Y102.10 .

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