Dollar strengthens

SINGAPORE: The dollar inched higher on Wednesday as the near-term focus shifted to the minutes of the Federal Reserve´s last policy meeting for hints on the future pace of U.S. monetary tightening.

The dollar index rose 0.1 percent to 89.805, which was up about 1.8 percent from Friday´s three-year low of 88.251.The greenback rose 0.3 percent to 107.70 yen.

Market players said stop-loss dollar buying gave an added lift to the dollar, which rose to 107.90 yen at one point.

Market participants attributed the dollar´s bounce over the past few sessions to short-covering after speculative trades helped push it down to a 15-month low of 105.545 yen last week. "It´s mainly a positioning clean-up in my view," said Tareck Horchani, head of sales trading in Asia Pacific for Saxo Markets in Singapore. The dollar will probably consolidate against the yen after its recent selloff, Horchani said.

Some market players were recently buying dollar/yen put options to position for dollar weakness, and the market now appears "well covered" against downside risks in the U.S. currency, he said. The yen showed a muted reaction to comments from Masatsugu Asakawa, Japan´s top currency diplomat, who was quoted as saying that yen´s recent moves were "one-sided".