Dollar strengthens broadly

The dollar hit an 11-month high against the yen and one-month high versus the euro on Wednesday and more gains were expected after an upgraded Federal Reserve economic outlook and firmer US data dented the greenback's appeal as a funding currency.
US two-year Treasury yields reached a 7-1/2-month high after solid retail sales data on Tuesday, making the dollar less attractive to fund investments in higher-yielding assets.
These factors pushed the dollar to a peak of 83.56 yen in European trade, its highest since mid-April. Traders said Japanese exporters were reluctant to sell the dollar and anticipated further strength. Last year's high of 85.53 yen was seen as important resistance.
The euro struggled against the dollar, falling to a one-month low of $1.30308 on trading platform EBS as it triggered stop losses below support at $1.3054, the 50 percent retracement of a January 16-February 24 rally. It later recovered to $1.3066, down 0.1 percent for the day. Further support for the euro loomed at the next major trough on daily charts at the February 16 low of $1.2974. "The dollar is profiting compared to the euro and the yen for the moment as the Fed has been a little less dovish," said David Bloom, head of FX research at HSBC.
Recent monetary easing steps by the Bank of Japan and the country's record trading deficit powered by demand for fossil fuels have also helped the dollar, which has slightly more than 9 percent against the yen since the beginning of February. "We have revised our dollar/yen forecast up to 90 in six months and think it will stay there until 12 months from now," said Raghav Subbarao, currency strategist at Barclays Capital. The dollar index, which measures its value against a basket of six major currencies, hit its highest in nearly eight weeks at 80.435.
The single currency strengthened against the Swiss franc, however, rising to a one-month high of 1.2117 francs before a Swiss National Bank rate decision on Thursday. Although economists polled by Reuters expect the SNB to stick to its euro/Swiss floor at 1.20 francs and keep interest rates at zero, there have been calls for the bank to raise the floor. The Australian dollar also dropped against its US counterpart, hitting a seven-week low of US $1.0465.