Dollar firms on signs of rate hike

NEW YORK (AFP) - The dollar strengthened Wednesday against the euro and yen on speculation the Federal Reserve would hike interest rates to curb inflationary pressures. The euro was at 1.5693 dollars around 2100 GMT, down from 1.5781 dollars late Tuesday in New York. The dollar rose to 107.86 yen from 107.25. John Kicklighter, analyst at Forex Capital Markets, noted a turnaround from last week's "remarkably bearish" sentiment on the US economy and fears of a collapse of mortgage finance giants Freddie Mac and Fannie Mae. With banks' earnings reports coming in better than expected, the outlook for the markets brightened, he said. "So did forecasts for the eventual turn to rate hikes from the Fed," he added. Underpinning the dollar was a sharp fall in oil prices -- down four dollars a barrel in New York -- that dampened... [read full story]