Dollar hits 3-month high on rate view

A currency trader works near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul.

The dollar jumped to three-month highs on Monday, extending its recent run of gains as expectations of a US rate rise gathered pace, while gold prices plunged to their lowest in more than five years.
The greenback posted its best weekly performance in about two months last week, after Federal Reserve Chair Janet Yellen reiterated that US interest rates will probably rise later in the year. Data on Friday showing a robust pick up in US consumer prices and housing starts also helped the rally.
Global equities eased off three-week highs hit on Friday, though European shares approached six-week peaks.
The dollar hit its highest since April 23 against a basket of major currencies before pulling back slightly to trade flat on the day.
The euro hit its lowest since late April but last traded up 0.2 per cent at $1.0853. The yen was flat at 124.09 to the dollar. The New Zealand and Australian dollars were big fallers in Asia but traders said the kiwi had recovered some ground after New Zealand Prime Minister John Key said the currency's 25 per cent fall over the last year had been faster than expected. It was last up 0.8 per cent on the day.
"All of the commodity currencies are taking a hammering from the dollar's rise and in the broader scheme of things this is a small retracement," said a dealer at an international bank in London.
The pan-European FTSEurofirst 300 equity index rose 0.4 per cent. Amsterdam-listed chemicals company OCI rose 11 per cent on merger talk Gold miners took a hit, although traders said market sentiment was helped by the re-opening of Greece's banks.
Asian stocks were mixed and Europe rose on Monday as investors put Greece's debt crisis behind them to focus on the outlook for interest rates, corporate earnings and China's economy.
In early trading, France's CAC-40 rose 0.5 per cent to 5,151.91 and Germany's DAX added 0.4 per cent to 11,720.11. Britain's FTSE 100 gained 0.4 per cent to 6,798.53. Wall Street looked set for gains. Dow futures were up 0.2 per cent to 18,025.00 and S&P 500 futures rose 0.1 per cent to 2,121.10.
On Friday, the Shanghai index gained 1.5 per cent. Analysts say it is unclear, though, whether the market will hold up once restrictions on selling are lifted.
"The question is whether this tentative stability will be followed by a rebound or another leg of economic weakness and, potentially, market distress," said Citigroup in a report.
The Shanghai Composite Index gained 0.9 per cent to 3,992.11 and Sydney's S&P/ASX 200 added 0.3 per cent to 5,686.90. Singapore and New Zealand also rose. Tokyo was closed for a holiday. Seoul's Kospi declined 0.2 per cent to 2,073.31 and India's Sensex gave up 0.4 per cent to 28,351.01. Taiwan, Bangkok and Manila also fell. Hong Kong's Hang Seng was little changed at 25,404.81.
Sensex down 43 points
After plunging over 140 points during the intra-day, a barometer index of the Indian equity markets provisionally closed 43 points lower on Monday.
The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange provisionally closed 43.19 points or 0.15 per cent down during the day's trade session.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) provisionally closed flat. It was down 6.40 points or 0.07 per cent up at 8,603.45 points.
The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 28,544.28 points, provisionally closed at 28,420.12 points (3.45pm), down 43.19 points or 0.15 per cent from the previous day's close at 28,463.31 points.

• Gold and Forex