* Dollar hits loftiest levels since 2003 vs euro, currency
* Yen plumbs weakest levels since February
* Sterling wallows at three-week lows as BoE holds steady
TOKYO, Dec 16 The dollar stood tall on Friday,
on track for hefty gains for the week, after scaling 14-year
highs against the euro as well as a broader basket of currencies
on expectations of more U.S. Federal Reserve interest rate
The dollar has been on a tear since the Nov. 8 election of
Donald Trump, whose administration is expected to embark on
inflation-stoking stimulus policies. On Wednesday, the Fed
raised interest rates by 25 basis point as widely expected, and
also tipped three hikes instead of two in 2017.
Against its Japanese counterpart, the dollar rose 0.1
percent to 118.33 yen, after touching 118.66 yen
overnight, its highest since February. It was up 2.6 percent for
"Toward the year-end, it's 120, here we come!" said Kaneo
Ogino, director at foreign exchange research firm Global-info Co
"There are some Japanese commercial accounts that were
caught by surprise by the dollar's rise after Trump's election,
and still have cover their dollar positions, and are now
recalculating their internal expectations for dollar/yen for
next year," he said.
U.S. inflation data released on Thursday showed consumer
prices moderated in November, but the underlying trend continued
to point to firming inflation pressures amid rising rents, which
could support more interest rate increases from the Federal
Reserve next year.
Fed funds futures showed investors were pricing in a 40
percent chance for tightening by the Fed's March meeting, and a
50 percent probability for a May rate increase.
The dollar index, which tracks the greenback against a
basket of six major rival currencies, rose 0.2 percent to
103.210, after surging to 103.56 on Thursday. It was up
1.6 percent for the week.
The euro edged down 0.1 percent to $1.0408, after
plumbing $1.0366 on Thursday. It was down 1.4 percent for the
Sterling licked its wounds after sinking to a three-week low
against the dollar overnight. It was slightly lower at $1.2415
after slipping as low as $1.2378, and was down 1.3
percent for the week.
The Bank of England said on Thursday that sterling's strong
performance over the past month could soften an expected surge
in British inflation next year, as its policymakers voted
unanimously to keep interest rates unchanged at a record low
BoE officials noted sterling had appreciated by over 6
percent since its latest forecasts in November.
(Reporting by Tokyo markets team; Editing by Richard Pullin)