FOREX-Dollar rises on hawkish Fed speakers, kiwi on track for weekly gain

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FOREX-Dollar rises on hawkish Fed speakers, kiwi on track for weekly gain

SINGAPORE Reuters -- The dollar was strong on Friday, buoyed by a chorus of hawkish Federal Reserve speakers and investors bet a solid jobs data later in the day that will keep the world's biggest central bank on its aggressive tightening path to tame inflation.

The rising dollar pushed the pound and euro off their intra-week highs in early Asia trade, which saw a break of 145 per dollar for the Japanese yen.

The pound was down 0.09% to $1.1150 from a high of $1.1493 earlier in the week after the U.K. government reversal of its planned cut to the highest income tax rate.

The euro was 0.05% lower at $0.9788, after two unsuccessful attempts to regain parity this week.

Overnight, a slew of Fed officials reinforced the view that the central bank is nowhere near done with its hiking cycle as it seeks to bring down inflation, and that rates are expected to go up further.

Rodrigo Catril, a currency strategist at National Australia Bank, said that the rhetoric coming from Fed speakers has been very clear in terms of this hawkish message.

The argument that the Fed is very committed to keeping its foot on the tightening pedal is supported by the fact that the U.S. looks in a much stronger place than others, and that's why it's reasserted. The U.S. dollar index was up 0.04% at 112.29 after it rose nearly 1% overnight, and was away from a low of 110.05 earlier in the week.

The U.S. nonfarm payrolls report will be released later on Friday, with economists forecasting 250,000 jobs to have been added last month, compared to 315,000 in August.

The kiwi rose 0.04% to $0.5657 and was on track for its first weekly gain since August, having seen some support from a similarly hawkish Reserve Bank of New Zealand after it lifted its official cash rate by 50 basis points on Wednesday, and promised more to come.

While the Reserve Bank of Australia lifted interest rates by a smaller than expected 25 bp, it added that further tightening would still be needed.

In another sign that central banks are still far from being over in their fight to control decades-high inflation, European Central Bank policymakers appeared to be worried last month that high inflation could become more severe, making policy tightening necessary even at the cost of weaker growth.