29 June 2005, 10:33  Dollar hits highest in more than 8 months vs yen

The dollar rose to its highest level in more than eight months against the yen on Wednesday ahead of a Federal Reserve meeting that is seen widening the interest rate advantage the U.S. currency has over its rivals. The dollar kept most of the previous day's gains versus the euro, made partly on data showing U.S. consumer confidence jumped to a three-year high while a German survey suggested consumer sentiment in Europe's largest economy is set to worsen. With the market already pricing in a U.S. rate hike, attention has turned to any hint in the post-meeting statement of a pause in further rises, although some dealers said the central bank was unlikely to alter its position. "I don't think they are going to add anything special to their comments," said the chief trader at a European brokerage. "They are still going to keep raising at a measured pace until rates hit 4 percent. That's the market's consensus." The Fed is expected to raise rates by a quarter percentage point to 3.25 percent on Thursday at the end of its two-day meeting. The key rate in the euro zone has stayed at 2 percent for over two years, while it has held at almost zero percent in Japan for more than four years. The Conference Board said its U.S. consumer confidence index rose to 105.8 in June from an upwardly revised 103.1 in May. That came after a survey by the GfK research group predicted German consumer sentiment will worsen significantly in July because of anxiety over an expected September election. The dollar fetched around 110.05 yen as of 0320 GMT after rising to just above 110.17 yen, its highest level since mid-October, according to electronic trading platform EBS.

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