The dollar rose to a six-year high in the upper ¥108 range on Thursday morning in Tokyo after the U.S. Federal Reserve raised its outlook for the trajectory of its key interest rate.
At noon, the dollar fetched ¥108.56-57 compared with ¥108.32-42 in New York and ¥107.26-28 in Tokyo at 5 p.m. on Wednesday.
The euro was quoted at $1.2869-2869 and ¥139.71-75, against $1.2861-2871 and ¥139.29-39 in New York, and $1.2959-2961 and ¥139.00-04 in Tokyo late Wednesday afternoon.
Concluding its regular two-day policy meeting on Wednesday, the Federal Open Market Committee upgraded its median target for the benchmark short-term rate at the end of 2015 to 1.375 percent from 1.125 percent in June.
Dollar bulls were heartened by the hawkish turn, dealers said, though the FOMC did not drop its pledge to keep the rate low for a “considerable time” after ending a massive bond purchase program, as some had speculated.
The central bank further tapered monthly purchases to $15 billion, on track to announce their end in October.
“Given the dollar’s jump despite the unchanged wording, I still find room for the currency to climb as the FOMC clarifies the timing of the first rate hike at future meetings,” said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.
The rate has sat between zero and 0.25 percent since December 2008.
The euro was near a 14-month low against the dollar in the early morning as traders braced for Scotland’s referendum on independence from the United Kingdom later in the day.
A vote to break from the union would drive the pound and the euro down, dealers said.
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