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FOREX-Dollar on track for weekly gain as investors await Yellen
October 14, 2016 / 12:37 AM / a year ago

FOREX-Dollar on track for weekly gain as investors await Yellen

* Expectations of December Fed hike lift greenback

* Sterling edges up, though still down for Brexit-roiled week

TOKYO, Oct 14 (Reuters) - The dollar held below this week’s highs on Friday but still on track for a weekly gain, as investors awaited U.S. retail sales data and remarks from Federal Reserve officials that could cement expectations of a U.S. interest rate hike this year.

The dollar index, which tracks the greenback against a basket of six major rival currencies, edged up 0.1 percent to 97.615.

That was below a seven-month high of 98.129 touched on Thursday, but still up 1 percent for the week, and more than 2 percent for the month so far.

Retail sales data could offer some insight on the strength of consumption. Following the data, Fed Chair Janet Yellen will address a Boston Fed economics conference, at which Boston Fed governor Eric Rosengren will also speak.

The minutes of the latest Fed meeting in September, released on Wednesday, prompted investors to raise their bets of a Fed rate increase at its December policy meeting. Markets are now pricing in around a 70 percent chance that the Fed will move.

“There were three dissents, but the market has been jawboned into believing the Fed will raise rates in December,” said Bill Northey, chief investment officer of the private client group at U.S. Bank in Helena, Montana.

Friday’s Fed comments will likely offer “no material departures from that script,” he said.

The dollar has also benefited as Democratic presidential nominee Hillary Clinton widened her lead in opinion polls over Republican rival Donald Trump, as Clinton is viewed as the candidate whose election would likely preserve the status quo.

But on Thursday, downbeat trade data from China took some wind out of the dollar’s sails. Chinese exports fell 10 percent last month year-on-year, far more than expected.

Against the yen, the dollar edged up 0.2 percent to 103.83 , shy of its overnight high of 104.62 yen, which was its strongest level since late July. It was up 0.9 percent for the week.

The euro was steady at $1.1045, recovering from an overnight low of $1.0982, its lowest level since late July. It was down 1.4 percent for the week.

Sterling was down 0.2 percent at $1.2221, and looked set for a loss of 1.7 percent for the week in which it moved back towards the previous week’s 31-year lows.

British Prime Minister Theresa May’s offer to involve lawmakers in the process of leaving the European Union has calmed some investors’ fears of a “hard Brexit.” (Reporting by Tokyo markets team; Editing by Kim Coghill)

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