* Dollar up against most majors on increased Sept Fed hike
* Fed's Rosengren says rate increase may be needed
* Announcement of speech by Fed's Brainard boosts rate hike
(Adds U.S. trading, new throughout)
By Dion Rabouin
NEW YORK, Sept 9 The dollar rose on Friday as
remarks by Federal Reserve policymakers helped boost investor
expectations of a near-term increase in U.S. interest rates.
Boston Fed President Eric Rosengren said in a speech on
Friday that gradual interest rate increases might be in order
with the U.S. economy at full employment and that low interest
rates were increasing the chance of an overheated economy.
"Those hawkish comments from Rosengren helped the dollar;
also in general the probability of a September hike has gone up
a bit," Vassili Serebriakov, FX strategist at Credit Agricole in
New York, said in a telephone interview.
Rosengren's comments followed the announcement late on
Thursday that U.S. Fed Governor Lael Brainard would give a
speech on Monday.
Brainard is considered one of the Fed's more dovish members,
meaning she is more inclined to leave rates lower in order to
strengthen employment. The announcement of her speech likely
means she will deliver the message that the Fed is close to
raising rates, analysts said, suggesting there may be consensus
on the rate-setting Federal Open Market Committee (FOMC) to do
Brainard and Rosengren are both voting members on the FOMC,
which sets the target for U.S. short-term rates.
Fed funds futures prices showed traders had modestly raised
their bets on a rate increase at the next FOMC policy meeting on
The dollar was also bolstered by rising U.S. Treasury debt
yields, Serebriakov said.
Benchmark U.S. 10-year notes touched their
highest level in more than two months on Friday. Higher Treasury
yields boost U.S. interest rates, which makes the dollar more
attractive for investors to hold.
The dollar index, which tracks the U.S. currency
against a basket of six currencies, rose 0.4 percent to 95.438,
nearing its highest levels on Tuesday before a weak U.S. service
sector report knocked the dollar 1 percent lower.
The euro fell 0.4 percent against the dollar to
The dollar rose 0.2 percent against the yen, also
helped by reports that the Bank of Japan was studying options to
steepen its bond yield curve.
(Reporting by Dion Rabouin; Editing by Jonathan Oatis)