* Dollar index pulls away from 4-1/2-month lows
* Fed speakers remind markets of rate hike plans
* Sterling dips before Britain formally launches Brexit
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, March 29 The dollar pulled away from
4-1/2-month lows against a currency basket on Wednesday after
solid data backed expectations for more U.S. interest rate hikes
this year, while sterling was knocked by Britain triggering its
exit from the European Union.
The dollar index, which tracks the greenback against six
major rival currencies, rose to 99.911, up 0.2 percent.
It managed to crawl off a low of 98.858 hit earlier this week,
its weakest level since Nov. 11, in the wake of U.S. President
Donald Trump's failed healthcare reform bill.
Helping the greenback was data that showed U.S. consumer
confidence index hit 125.6 in March, surpassing expectations for
a reading of 114, and much higher than 116.1 in February. The
March level marked the highest since December 2000.
The numbers also pushed up U.S. Treasury yields, further
bolstering the dollar's appeal. The yield on benchmark 10-year
notes rose to 2.412 percent in Asian trading, from
its U.S. close of 2.409 percent on Tuesday.
U.S. Federal Reserve Vice Chairman Stanley Fischer said in a
television interview on Tuesday that two more increases to U.S.
overnight interest rates this year seemed "about right".
"(The dollar's strength) is probably more a function of the
very strong U.S. consumer confidence numbers we saw yesterday
and the somewhat more hawkish noises we've seen emanating from
the Fed," said Alvin Tan, currency strategist at Societe
Generale in London.
The Fed raised rates in March, and a majority of the central
bank's policymakers foresee at least two more increases this
But Fed Governor Jerome Powell said on Tuesday that the
collapse of the healthcare reform bill had made the U.S. central
bank's job harder as it tried to anticipate which set of
policies would pass.
Trump's healthcare reform failure last week raised doubts
about his ability to carry out his fiscal stimulus and tax cuts,
and pressured the dollar to 110.11 yen on Monday, its
lowest since Nov. 18. It has since recovered almost 1 percent
and last stood at 111.15 yen, flat on the day.
"I think the optimism about 'Trumponomics', against the
failure to pass the Obamacare reform bill, is still dominating
the dollar/yen market," said Masafumi Yamamoto, chief forex
strategist at Mizuho Securities in Tokyo.
Sterling wallowed at one-week lows, 0.4 percent down on the
day at $1.2395 as investors braced for British Prime
Minister Theresa May's move later on Wednesday to formally file
paperwork to leave the European Union.
The euro was lower 0.3 percent on the day at $1.07835
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Reporting by Ritvik Carvalho; additional reporting by Tokyo
markets team; Editing by Keith Weir)