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TOKYO: The dollar edged higher against a basket of currencies on Monday, moving away from last week´s 6-1/2-month lows and shrugging off news of North Korea´s latest missile test as investor attention turned to the Federal Reserve´s expected interest rate hike next month.
The dollar index, which tracks the U.S. currency against a basket of six major rivals, inched up 0.1 percent to 97.502 , holding well above last week´s nadir of 96.797, its lowest since Nov. 9. San Francisco Federal Reserve President John Williams said in Singapore on Monday that medium-term trends in U.S. inflation remained "pretty favourable," despite some recent soft consumer price data. The U.S. economy was at or near the Federal Reserve´s goals of full employment and stable prices, Williams said, adding that the U.S. central bank wanted to ensure markets stayed calm as the Fed slowly returned interest-rate policy to normal. Data on Friday indicated the U.S. economy was modestly expanding, which might allow the Fed to raise interest rates further and to begin paring its $4.5 trillion balance sheet. Gross domestic product grew at an annual 1.2 percent in the first quarter, faster than the 0.7 percent reported last month, though softening business investment and moderate consumer spending might impede an acceleration in the second quarter.
