April 2, 2006	Sunday	Rabi-ul-Awwal 3, 1427

NEW YORK, April, 1: The dollar rallied on Friday after a slew of economic data reinforced the view that the Federal Reserve will most likely raise US rates at least once more this year. In addition, the market is girding itself for next week’s heavy US data calendar, which includes the March employment report, which some people think could make or break another rise in borrowing costs to 5.0 per cent.

Rate expectations in the United States and the euro zone remain the overarching theme in the currency markets. So when two gauges of regional US business activity beat forecasts, the dollar got a boost against the euro and the yen.

The US. and eurozone are raising rates and the question of how long they raise rates, how much they raise rates and where the top is, is one that is endlessly debated, said John McCarthy, director of foreign exchange trading at ING Capital Markets in New York.

The dollar and the euro, strangely enough, are being rewarded, he said.—Reuters