Early trade in New York: Dollar gains against basket of currencies

The dollar gained to seven week highs against a basket of currencies on Thursday, after hawkish comments by a Federal Reserve official late on Wednesday encouraged investors to expect a near-term interest rate hike. Fed Governor Lael Brainard said an improving global economy and a solid US recovery mean it will be "appropriate soon" for the Federal Reserve to raise rates, adding an important voice to the chorus of officials signalling rates may rise as soon as mid-March.
Those remarks come after New York Fed President William Dudley and San Francisco Fed President John Williams rattled investors on Tuesday with more aggressive than expected language about raising rates.
"We've had this great run of data in the US and the expectation on a March rate move has gone up," said Steven Englander, global head of foreign exchange strategy at Citigroup in New York.
Futures traders are now pricing in a 78 percent chance of a Fed hike in March, up from 66 percent on Wednesday and from 35 percent on Tuesday, according to the CME Group's FedWatch Tool.
Fed Chair Janet Yellen and Vice Chair Stanley Fischer are both due to speak on Friday.
The dollar rose 0.38 percent against a basket of six major currencies to 102.17, its highest since January 11. The greenback was last up 0.64 percent against the Japanese yen at 114.43, the highest since February 15 and gained 0.41 percent against the euro to $1.0503. The dollar has strengthened even as many analysts see limited further gains for the currency due to worries about the impact of higher rates and a stronger dollar on global growth.