* Dollar rises nearly 0.5 pct vs yen, still below 10-month
* U.S. October home prices data beats expectations
* Expectations for more Fed rate hikes in 2017 support
By Sam Forgione
NEW YORK, Dec 27 The U.S. dollar rose against
the yen on Tuesday on stronger-than-expected U.S. economic data
and expectations for a hawkish Federal Reserve, but remained
below a recent 10-month high in thin holiday trading.
The data helped underscore expectations that the Fed would
raise interest rates at a faster pace next year, a view that
gained traction after the Fed on Dec. 14 projected three rate
hikes next year, up from the two foreseen in September.
Trading was thin as markets in Britain, Australia, New
Zealand, Canada and Hong Kong were closed for holidays.
"The prospect of Fed tightening next year is keeping bonds
under pressure, (Treasury) yields up and the dollar bid, and
obviously the Case-Shiller data is helping that," said Kathy
Lien, managing director at BK Asset Management in New York.
The S&P CoreLogic Case-Shiller composite index of home
prices in 20 metropolitan areas rose 0.6 percent in October from
the previous month, outpacing expectations of economists polled
by Reuters for a 0.5 percent increase.
The dollar extended gains to a session high against the yen
of 117.61 yen, putting it up nearly 0.5 percent against
the Japanese currency on the day, in the wake of data showing
U.S. consumer confidence hit its highest level in more than 15
years in December.
The dollar remained below a 10-month high against the yen,
of 118.66 yen, touched Dec. 15 and a 14-year high against a
basket of major currencies touched Dec. 20. The dollar index
, which measures the greenback against a basket of six
major rivals, was last flat at 103.020, below the 14-year peak
Analysts said the dollar's uptrend looked intact, even as
120 yen and parity with the euro remained elusive.
"The dollar has been and is likely to continue to be
supported by expectations that a new administration in
Washington is going to be inflationary, and thus force the Fed
to raise U.S. borrowing costs at a faster pace in 2017," Omer
Esiner, chief market analyst at Commonwealth Foreign Exchange in
Washington, said in a research note.
The dollar index was last on track to gain about 4.5 percent
for 2016 to mark its fourth straight yearly increase. All the
gains have come since the Nov. 8 U.S. election on expectations
that U.S. President-elect Donald Trump's economic plans and the
faster pace of Fed rate hikes would boost the dollar.
The euro was last roughly flat against the greenback
(Reporting by Sam Forgione; Additional reporting by Patrick
Graham in London; Editing by Chizu Nomiyama and Leslie Adler)