Dollar hits two-month high

The dollar climbed to a two-month high against the Swiss franc and held near five-month peaks against the yen on Wednesday as investors kept flocking to currencies offering higher yields.
The market shrugged off data from the previous session showing the US trade deficit swelled to a record $68.0 billion in July, which some analysts said showed investors are becoming immune to figures highlighting US dependence on foreign capital.
The yen has fallen prey as a run of weak economic data has convinced many market players the Bank of Japan will be slow in raising rates from 0.25 percent in the months ahead, keeping it the lowest yielding currency among majors for a while longer.
"It's more of a yen story at the moment," said Luke Waddington, head of forex trading at Royal Bank of Scotland. "People are more interested in selling yen than buying dollars."
Analysts said the Japanese currency may start to stabilise ahead of the meeting of Group of Seven finance ministers in Singapore this weekend, with the potential risk of any mention of currency adjustments or the yuan sparking yen gains.
A statement issued after the G7 met in April surprised many in the market by explicitly naming China in calling for greater currency flexibility and appreciation to help fix global imbalances, igniting a dollar sell-off, especially against the yen.
The yen is often traded as a proxy for the tightly managed Chinese currency. The dollar struck a two-month high against the Swiss franc near 1.2550 francs extending gains after a Swiss central banker said he sees growth slowing next year. Along with the yen, the Swiss franc is one of the lowest-yielding major currencies.
The dollar was little changed from late New York trade near 117.95 yen off Tuesday's peak of 118.15 yen on electronic trading platform EBS - the strongest since mid-April. The euro was little changed at 149.65 yen hovering within range of an all-time high of 150.73 struck on EBS in late August. The single European currency traded at $1.2685 in sight of the six-week low of $1.2647 struck earlier in the week. Against the Swiss franc, the euro climbed to a 2-1/2-year high above 1.5900 francs according to Reuters calculated data.