September 28, 2018 / 3:05 PM / 8 months ago

FOREX-Dollar gains on euro woes, Fed rate outlook

    * Euro wobbles on Italy budget concerns, inflation data
    * Dollar/yen hits 9-month high, up 0.9 pct on the week
    * Upbeat U.S. data seen supporting dollar
    * Graphic: World FX rates in 2018

 (Adds new comment, U.S. data, FX table, updates prices, changes
byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Sept 28 (Reuters) - The dollar climbed to a
two-week peak versus a basket of currencies on Friday, boosted
by gains against the euro amid concerns about the Italian budget
and a U.S. interest rate outlook that reflects multiple rate
hikes until 2020.
    The U.S. dollar also rose to a nine-month high against the
    As the third quarter winds down, the dollar index, a gauge
of its value against six major currencies, was on track to post
its second consecutive quarterly gain of about 0.7 percent. For
the last six months, the greenback has advanced nearly 6
    "The U.S. dollar remains a metaphorical rock in a sea of
troubles," said Karl Schamotta, director of global product and
market strategy at Cambridge Global Payments in Toronto.
    "The growth outlook for other Group of 10 countries and the
emerging markets remains uncertain, and increased confidence in
the forces compelling the Federal Reserve to hike rates next
year is helping to lift the U.S. dollar against its
counterparts," he added.
    In mid-morning trading, the dollar index rose 0.4 percent to
95.302, rising for three straight sessions.
    The dollar rose to a nine-month peak versus the yen of
113.63 yen, and was last up 0.1 percent at 113.51 yen. 
    U.S. data on Friday all supported the view of an economy
that is on a stable growth path.
    U.S. consumer spending rose 0.3 percent last month after an
unrevised 0.4 percent gain in July, while a measure of
underlying inflation remained at the Fed's 2 percent target for
a fourth straight month.
    The Chicago Purchasing Management index for September was
60.4, lower than the consensus forecast. The U.S.
consumer sentiment index for September, on the other hand, was
slightly lower than forecast at 100.1, but still the highest
since March.
    The euro, meanwhile, slipped below $1.16 for the first time
in two weeks after Italy's government agreed on a budget seen by
some investors as defying Brussels.
    Political wrangling over the budget in heavily indebted
Italy has put a lid on a recent revival in the euro's fortunes
against the dollar.
    The single currency recorded its biggest one-day decline for
nearly two months on Thursday as the battle over fiscal policy
intensified in the euro zone's third-largest economy.

    Financial markets are nervous that the Italian government's
spending plans will boost Italy's debt, which is already the
second highest in the euro zone as a share of economic output
after Greece, near 131 percent of gross domestic product (GDP).
    The government is targeting a budget deficit at 2.4 percent
of GDP, inside the 3 percent ceiling prescribed by EU rules.
    Currency bid prices at 10:25AM (1425 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1586        $1.1639     -0.46%         -3.42%      +1.1651     +1.1570
 Dollar/Yen       JPY=        113.5500       113.3600    +0.17%         +0.78%      +113.6300   +113.3300
 Euro/Yen         EURJPY=     131.59         131.96      -0.28%         -2.66%      +132.3000   +131.1900
 Dollar/Swiss     CHF=        0.9769         0.9771      -0.02%         +0.26%      +0.9777     +0.9738
 Sterling/Dollar  GBP=        1.3002         1.3080      -0.60%         -3.77%      +1.3090     +1.3003
 Dollar/Canadian  CAD=        1.2959         1.3040      -0.62%         +3.04%      +1.3049     +1.2956
 Australian/Doll  AUD=        0.7219         0.7206      +0.18%         -7.46%      +0.7227     +0.7202
 Euro/Swiss       EURCHF=     1.1320         1.1374      -0.47%         -3.15%      +1.1378     +1.1282
 Euro/Sterling    EURGBP=     0.8911         0.8900      +0.12%         +0.30%      +0.8912     +0.8873
 NZ               NZD=        0.6613         0.6617      -0.06%         -6.68%      +0.6624     +0.6599
 Dollar/Norway    NOK=        8.1563         8.1537      +0.03%         -0.62%      +8.1914     +8.1498
 Euro/Norway      EURNOK=     9.4515         9.4942      -0.45%         -4.03%      +9.4985     +9.4526
 Dollar/Sweden    SEK=        8.9047         8.8546      +0.09%         +8.57%      +8.9133     +8.8420
 Euro/Sweden      EURSEK=     10.3190        10.3100     +0.09%         +4.88%      +10.3220    +10.2860
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Tom Finn in London; Editing by Andrea Ricci)
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