* Fed comments dominate as Trump offers no detail on
* Dollar index hits 7-week high
* Peso up, yuan losses limited
By Ritvik Carvalho
LONDON, March 1 The dollar hit a seven-week high
on Wednesday on hopes the U.S. Federal Reserve would lift rates
this month, after hawkish comments from two of its top officials
overshadowed U.S. President Donald Trump's first major policy
speech to Congress.
New York Fed President William Dudley, a permanent voter on
the U.S. central bank's open market committee and close ally of
chair Janet Yellen, said the case for tightening monetary policy
"has become a lot more compelling".
John Williams, President of the San Francisco Fed, said a
rate increase was very much on the table for serious
consideration at the March meeting given full employment and
That drove the return for holding dollars on the debt market
higher, with 10-year Treasury yields last up around 5 basis
points at around 2.4 percent.
Money market futures are now pricing in almost
a 70 percent chance of a rise in official interest rates in
March, compared to a just over 30 percent chance before the Fed
"The dollar's bid because of the hawkish Fed comments last
night," said Richard Wiltshire, chief currency broker at ETX
Capital in London.
The greenback climbed 1 percent to touch a two-week high of
113.88 yen, and gained half a percent against the euro to
Any expectations that Trump would give details on stimulus
plans that drove stellar gains in the dollar in November were
In a speech that contrasted with harsher rhetoric during his
election campaign, Trump said he was open to reforming the U.S.
immigration system and pledged massive tax relief for the middle
class, but did not expand further.
China's yuan, which has been a target for markets given
Trump's previous aggressive talk on trade, but which has risen
for the past two months as the dollar's rally stalled, was down
just 0.2 percent on the day.
The Mexican peso, seen as the most vulnerable to Trump's
protectionist policies, also took his speech in its stride,
rising 0.5 percent to 19.996 pesos per dollar.
"Today was 'good Trump' compared to the aggressive 'bad
Trump' shown on Twitter," said Ayako Sera, market strategist at
Sumitomo Mitsui Trust Bank in Tokyo.
The dollar also rose against sterling, with the pound
falling below $1.23 for the first time since late January after
weak UK manufacturing and credit data.
The greenback's broad gains on the day generated a nearly
0.8 percent rise in the dollar index, which measures the
currency against a basket of six major peers, to reach
its highest since Jan. 11.
(Additional Reporting by Hideyuki Sano and Yuzuha Oka in Tokyo;
Editing by Mark Trevelyan)