Dollar higher

TOKYO: The dollar held near a four-month high against a basket of major currencies on Wednesday, buoyed by the outlook for a strong U.S. economy and rising yields amid signs of a slowdown elsewhere, especially in Europe.

The dollar´s index ticked down 0.1 percent in Asia after having gained 1 percent in the preceding two days.

It rose to as high as 92.57 on Tuesday, its firmest since Jan. 10.The index rose above its 200-day moving average for the first time in a year, triggering a wave of short-covering.

While the Federal Reserve is widely expected to keep the benchmark interest rate on hold at its policy meeting ending on Wednesday, it looks certain to raise borrowing costs next month, given signs of possible acceleration in the U.S. economy. The Institute for Supply Management (ISM) survey published on Tuesday showed U.S. factory activity slowed in April, but it highlighted shortages of skilled workers and rising costs, suggesting inflationary pressure is building.

Data published last month showed the Fed´s favourite gauge of consumer inflation had jumped in March. "We are seeing a roll-back of dollar selling since the start of the year. If the upcoming U.S. jobs data shows gains in wage rises, that would propel the dollar higher," said Shinichiro Kadota, senior currency strategist at Barclays Capital in Tokyo.