Dollar hits six-week high

TOKYO -- The dollar has hit fresh six-week highs against the yen and the euro, buoyed by expectations that US interest rates would rise at a faster pace.

Traders said the dollar was still riding a wave of bullish sentiment after the Federal Reserve last week suggested it could raise interest rates more aggressively if inflation heats up.

''The dollar is continuing to rise on speculation the Fed may step up the pace of its rate hikes," said Junya Tanase, a currency strategist at JPMorgan Chase in Tokyo. He said the dollar could soon challenge key resistance at just below 107 yen, but it would likely struggle to extend gains as long as doubts remain about the ability of the United States to finance its gaping current account deficit.

Amid thin trade due to Easter holidays in Europe and other overseas markets, the dollar was up for an eighth straight session against the Japanese currency, hovering around a fresh six-week high of 106.75 yen. It was up around 0.3 percent from late Friday's level in Tokyo.

A rise above a February peak of 106.86 yen would carry the US currency to its highest mark since early November.

The euro dipped as far as $1.2897, its lowest level since Feb. 14 and down around 0.4 percent from late Friday's level.

The single European currency has fallen over 5 percent from a record high near $1.3670 hit in December.

Dealers say that the market's biggest focus this week would be on the March US payrolls report, which could shed further light on the outlook for US interest rates. Economists expect the payrolls data, due on Friday, to show that the US economy created 220,000 jobs, down from 262,000 in February, which was the biggest gain in four months.

The report will be the highlight of a data-heavy week that includes the final reading of fourth-quarter gross domestic product and the February reading of the PCE price index, an inflation gauge favored by the Federal Reserve.