UPDATES ON JUNE 11 2008

JUNE 11 WEDNESDAY



Dollar Rises to 3-Month High; Fed May Show Inflation Concern .

The dollar rose to a three-month high against the yen

on speculation Federal Reserve officials

speaking today will highlight the risk of

inflation.


The dollar climbed to 107.72 yen, the highest

level since Feb. 26, before trading at 107.63 as

of 1:49 p.m. in Tokyo from 107.44 in New York

yesterday. It was also at $1.5475 per euro,

from $1.5467 yesterday. It has surged 2

percent the past two days, the most since

November 2005. The euro traded at 166.54

yen from 166.17 yen in New York. .


The U.S. currency may rise to 108 yen today, Kato said.

Futures on the Chicago Board of Trade showed

a 58 percent chance yesterday the Fed will

raise its 2 percent target rate for overnight

lending between banks by at least a quarter

point at its Aug. 5 meeting, compared with

32 percent the previous day. The contracts

showed a 96 percent chance the Fed will

increase the rate by December, up from

60 percent odds a week ago.

The Australian dollar fell to 94.39 U.S.

cents, the lowest level since May 16, after

an industry report showed consumer

confidence in June tumbled to its

lowest in almost 16 year

The New Zealand dollar dropped as low

as 75.03 U.S. cents, the weakest since

Jan. 23, amid expectations local interest

rates will decline while the Fed may raise

borrowing costs.


The U.S. currency traded at $1.9549 against

the British pound from $1.9544 yesterday, and was

at 1.0429 versus the Swiss franc from 1.0418.


The dollar has fallen 9.6 percent against

the euro and 7.3 percent versus the yen

since Sept. 18, when the Fed began to

lower borrowing costs from 5.25 percent.

The U.S. dollar index traded on ICE futures

in New York was at 73.610, following a 1.2

percent gain yesterday that was the biggest

since Dec. 14. The index tracks the dollar

against the currencies of six major trading

partners including the yen, euro and pound.