Dollar strengthens against euro and yen

Story link: Dollar strengthens against euro and yen

The dollar was up on Thursday in relation to the euro, the yen, sterling, and the Canadian dollar on Thursday.

The dollar was up 0.4 percent against the euro to $1.2177. It was rose by 0.5 percent against the yen to �107.76, gained 0.3 percent to $1.8176 against sterling, and advanced by 0.5 percent to C$1.2579 in relation to the Canadian dollar.

Predictions from JP Morgan that interest rates would stand at 4.25 percent by the end of the year and that the dollar would strengthen to $1.18 in relation to the euro and to �110 against the yen by March 2006 helped the dollar higher. So did comments by Federal Reserve chairman Alan Greenspan to a Congressional committee on Thursday.

He gave a fairly optimistic assessment of the US economy, including his belief that the US economy is on �a reasonably firm footing� and that inflation is at an acceptable level. He did, however, remark that there remains a risk that inflation could rise.

He also hinted that interest rates are likely to rise more, but he gave no indication how much they would go up or for how long.