Tuesday December 2, 2014 - 23:18:32 GMT
Reuters - www.reuters.com
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FOREX-Dollar rises broadly, at seven-year high vs yen
5:54pm EST
* Dollar at fresh highs above 119.00 yen
* Aussie & loonie back near multi-year troughs, EUR softer
* US economic outperformance, higher yields bullish for USD
By Ian Chua
SYDNEY, Dec 3 (Reuters) - The dollar hovered at a seven-year high against the Japanese yen early on Wednesday, following a broad rally overnight, thanks in part to a big rise in U.S. yields as the economic outlook there outshone most of its rich world peers.
The dollar traded at 119.22 yen, after reaching 119.29, a high not seen since August 2007. It has been steadily climbing toward the 2007 peak of 124.14 since September 2012.
The greenback also gained on the euro, which dipped to a 1-1/2 week low of $1.2377, from Tuesday's high of $1.2476. All of which lifted the dollar index to its highest in over four years at 88.668.
Commodity currencies also reversed most of their recent gains as a rebound in the prices of oil, gold and copper lost steam. As a result, the Australian dollar slid back below 85 U.S. cents toward a four-year trough of $0.8417 plumbed on Monday.
The Canadian dollar was at C$1.1407 per USD, not far from a five-year low of C$1.1466 set last month.
Providing a positive backdrop for the dollar, U.S. Treasury yields rose with the 2-year popping back above 0.50 percent, pulling away from a one-month low of 0.457 percent set on Monday.
"There were no notable data releases in the U.S. on Tuesday but the cumulative weight of Fed commentary and recent improved numbers did seem to take a toll on rates markets," analysts at BNP Paribas wrote in a note to clients.
"We remain broadly bullish on the USD and short EURUSD from 1.2520."
New York Fed President William Dudley and Vice Chair Stanley Fischer both this week painted a mostly rosy outlook for the U.S. economy.
The divergent outlook between the United States and Europe is clear with the European Central Bank (ECB) under pressure to provide even more stimulus to boost the still struggling euro zone economy.
While many analysts suspect no fresh measures will be unveiled at its next policy meeting on Thursday, there is much speculation the ECB will launch a program of sovereign-bond buying early in the new year.
Australia's third quarter gross domestic product data and two surveys on China's services sector due later in the day should provide a bit of distraction ahead of the ECB meeting. (Editing by Richard Chang)
© Thomson Reuters 2014. All rights reserved.
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