US dollar rises on higher rates (page 2 of 2)

The Japanese unit was also supported by August retail sales in Japan, which rose 1.5 pct from a year earlier, providing more evidence that consumers are helping the economy make a sustained recovery from deflation. However, The yen's rally against the greenback was short-lived as strong U.S. economic figure pushed the dollar as high as 113.50 yen.

Week ahead, Japan's Tankan quarterly survey of business sentiment will be closely watched for clues on the outlook of Japan's economy.

Range for this week: Y112.00-Y115.00

Sterling

Sterling fell against the dollar at the beginning of the week on expectations of more interest rate hikes by the U.S. Federal Reserve.

Concerns about the British economy also weighed on the pound after the release of a string of British economic data during the week. The Confederation of British Industry's (CBI) distributive trades survey gave a balance of -24 in September, well below the forecast -15 and the fastest annual pace of fall in sales volumes for 22 years.

Meanwhile, Final British GDP data for the second quarter showed annual growth at its weakest rate in 12 years at 1.5 pct, compared with a previous reading of 1.8 pct.

On the last trading, sterling rallied marginally against the dollar, shrugging off weak consumer confidence data as month-end position squaring drove investors to buy back the oversold pound. The GfK consumer confidence index fell to -5 in September from -4 in August, but received limited attention.

Next week, market will focus on a raft of British economic data, such as PMI and Industrial production, for further clues on the outlook of the U.K. economy. Bank of England rate decision will also be closely watched with expectations that BoE may keep its interest rate unchanged at 4.5 pct.

Range for this week: $1.7500-$1.7800