http://quote.bloomberg.com/apps/news?pid=10000101&sid=atNcHiUuQ.m8&refer=japanJune 15 (Bloomberg) -- The dollar rose on forecasts a government report today will show U.S. consumer prices increased in May and on speculation Federal Reserve Chairman Alan Greenspan will signal he's ready to raise the Fed's target interest rate.
The dollar has gained 2.7 percent against the euro since last Tuesday, when Greenspan said he'll do ``what is required'' if inflation surpasses central bankers' forecasts. The core consumer price index rose 0.2 percent, according to the median estimate of economists polled by Bloomberg News.
Should inflation exceed predictions, ``the initial reaction would be for the dollar to rally,'' said Marvin Barth, a currency strategist at Citigroup Inc. in London and a former Fed economist. ``If today's data do surprise on the upside, there's a good chance he will add to what he said last week,'' Barth said of Greenspan.
Against the euro, the dollar traded at $1.2037 at 11:26 a.m. in London from $1.2059 late yesterday in New York, according to EBS, an electronic foreign-exchange dealing system. The dollar may strengthen to $1.1950, said Barth. Versus the yen, the dollar was at 111.15 from 111.03. The yen earlier rose to 110.65.