EURO NEWS and prediksi forex

Dollar Rises as Stock Gains Encourage Demand for Higher Yields

May 14 (Bloomberg) -- The dollar rose against the yen as an increase in U.S. stocks encouraged investors to buy higher- yielding assets funded in Japan.

The 15-nation euro is overvalued by as much as 20 percent against the dollar, French Finance Minister Christine Lagarde said late yesterday. The Australian dollar fell against the Canadian dollar, the U.S. dollar and the pound as wage growth unexpectedly slowed last quarter.

``A stronger equity market is helping risk appetite,'' said Fabian Eliasson, vice-president of foreign exchange sales at Mizuho Corporate Bank in New York. ``In the short run, we are going to see higher dollar-yen.''

The dollar increased 0.4 percent to 105.13 yen at 10:06 a.m. in New York, from 104.75 yesterday. The dollar advanced 0.2 percent to $1.5445 per euro, from $1.5474. It touched the all- time low of $1.6019 on April 22. Japan's currency fell 0.2 percent to 162.32 per euro, from 162.10.

The Australian dollar dropped for a second day versus the U.S. dollar after a government report showed wage growth unexpectedly slowed last quarter, increasing concern economic growth is easing. The Aussie decreased 0.7 percent to 93.42 U.S. cents, 1.1 percent to 1.0705 versus the Canadian dollar and 0.5 percent to 2.0785 against the pound.

U.S. stocks advanced, led by financial shares, on a report showing slower-than forecast U.S. inflation and a narrower-than- estimated loss at mortgage-finance company Freddie Mac. The Standard & Poor's 500 Index increased 0.7 percent.

U.S. Inflation

Consumer prices in the U.S. rose 0.2 percent in April, following a 0.3 percent increase the previous month, the Labor Department said today in Washington. The median forecast of 77 economists surveyed by Bloomberg News was for an advance of 0.3 percent last month.

Finance ministers from the Group of Seven nations said in Washington on April 11 they were concerned about ``sharp fluctuations in major currencies'' and their ``possible implications for economic and financial stability.''

That message is being ``heard'' by financial markets, Lagarde said at a press conference in Brussels yesterday. The euro trading at $1.55 ``is still at 10 percent, 15 percent, 20 percent above the appropriate fundamentals,'' she said.

Futures on the Chicago Board of Trade showed a 92 percent chance the Fed will hold its target lending rate at 2 percent at its next meeting on June 25, compared with 94 percent odds yesterday. The balance of bets is for a cut of a quarter- percentage point. There's a 28 percent chance of an increase to 2.25 percent in September.

Dollar Outlook

The dollar will strengthen against most major currencies in the next six months as the Fed stops reducing interest rates, a survey of Bloomberg users showed.

The end of rate cuts will make American assets more attractive to international investors, according to U.S. respondents in the monthly Bloomberg Professional Global Confidence Index, which questioned 3,447 users from Chicago to London to Hong Kong. While users in the U.S. grew optimistic about the greenback, participants in Germany and France became pessimistic about the euro for the first time since the survey started in November.

The Fed has cut the target lending rate seven times since Sept. 18 to avert a recession, pushing the dollar down more than 10 percent versus the euro and yen.