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Euro hits 10-month yen high
  • | AFP | March 30, 2011 11:56 PM

The euro struck a ten-month high point against the yen, which also fell versus the dollar on Wednesday, as traders expected hikes to eurozone and US interest rates in the near future.

The euro struck a ten-month high point against the yen, which also fell versus the dollar, as traders expected hikes to eurozone and US interest rates in the near future.

In London trade, the European single currency reached 117.27 yen -- the highest point since May 13 2010. It then stood at 117.11 yen, compared with 116.35 yen late in New York on Tuesday.

The dollar gained to 83.08 yen from 82.46 late Tuesday, while the euro edged up to USD1.4113 from USD1.4110.

The euro and dollar were forging ahead against the yen as European and US central banks talked of hiking their interest rates, said Philip Wee, senior currency economist for DBS Group Research in Singapore.

"Basically it\'s a reflection of the sequencing of the G7 (Group of Seven) central banks\' rate hikes. Right now the ECB (European Central Bank) is the one that is ahead, and then Fed, I think there\'s a debate going on," he told AFP.

"Right now, in terms of the advanced economies, Japan is basically way behind in terms of the hikes."

On Tuesday St. Louis Federal Reserve President James Bullard, speaking on a visit to Prague, said the US could not keep its very loose monetary policy.

His comments followed a similar statement from the head of the Philadelphia Fed days earlier.

ECB president Jean-Claude Trichet meanwhile hinted at the beginning of March that the central bank would raise interest rates at its April meeting.

Elsewhere on Wednesday, the Australian dollar hit a post-float high against the greenback on, with analysts predicting it could reach USD1.10 by the end of the year.

The commodities-backed Aussie reached USD1.0327, its highest level since being floated in 1983, beating the previous record of USD1.0315, set on Monday.

CMC Markets foreign exchange dealer Tim Waterer said a key factor helping the currency was that Australian interest rates were higher than in most other developed countries.

"That is the case of traders buying the high-yielding currencies and being short on the low-yielding currencies to earn the interest rate differential effectively," he said.

In London trading on Wednesday, the euro changed hands at USD1.4113 against USD1.4110 in New York late Tuesday, at 117.11 yen (116.35), £0.8775 (0.8814) and 1.3001 Swiss francs (1.2984).

The dollar stood at 83.08 yen (82.46) and 0.9223 Swiss francs (0.9201).

The pound was at USD1.6062 (1.6007).

On the London Bullion Market, the price of gold gained to ]USD1,419.35 an ounce from $1,417.50 late Tuesday.

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