Economics
Dollar Rally Is Biggest Since January as Fed Stokes Divergence
- Dudley, Lacker add to speculation Fed may raise rates in June
- U.S., Japan address yen levels at G-7 finance chiefs meeting
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The dollar extended its biggest advance since January to a third week as traders weighed the possibility of tighter monetary policy in the U.S. against stimulus in Japan and other major economies.
The U.S. currency has rallied since the minutes of the Fed’s most recent meeting prompted traders to add to bets on a June rate hike. The move was also spurred by Bank of Japan Governor Haruhiko Kuroda reiterating that he’s ready to add to stimulus if necessary. Japan used a meeting of finance chiefs from the world’s major industrialized nations to warn of the economic risks from sharp swings in the yen, even as the U.S. made clear that currency markets remain calm.