Dollar surges against Swedish crown on Riksbank, gains against yen
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Euro, Hong Kong dollar, U.S. dollar, Japanese yen, British pound and Chinese 100-yuan banknotes are seen in a picture illustration shot January 21, 2016. REUTERS/Jason Lee/Illustration/File Photo
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By Sam Forgione
NEW YORK (Reuters) - The U.S. dollar hit its highest in more than seven and a half years against the Swedish crown after dovish comments from Sweden's central bank, and hit a three-month high against the yen on expectations of a December Federal Reserve rate hike.
Sweden's Riksbank said the chances of another interest rate cut had increased and it was ready to expand its quantitative easing program further. The Riksbank has already slashed rates to negative 0.5 percent, and is on track to buy 40 percent of the stock of outstanding government bonds by year end.
The dollar was last up 1.81 percent against the Swedish crown at 9.0689 crowns
"You sort of expect the central bank to say something like, 'policy is easy, just the way we like it,'" said Steven Englander, managing director and global head of G10 FX strategy at Citigroup in New York. "To take a step further and endorse further weakness ... conveys to the market that you're supremely dovish."
The dollar hit a three-month high against the yen of 105.34 yen
The dollar also gained against sterling
"People are looking for the Fed to raise rates, obviously in December, and maybe more rate hikes in 2017," said David Gilmore, partner at FX Analytics in Essex, Connecticut. "The market seems comfortable owning dollars and selling euro rallies."
Traders last saw a more than 78 percent chance that the Fed would hike rates in December, up slightly from Wednesday's probability, according to data from CME Group's FedWatch program.
The dollar index <.DXY>, which measures the greenback against a basket of six major currencies, was last up 0.25 percent at 98.875.
(Reporting by Sam Forgione; Additional reporting by Jemima Kelly in London; Editing by Chizu Nomiyama)
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