The market has already priced in another interest rate hike in March, so the dollar's scope for further gains on rate hike expectations is limited. |
The stronger economic outlook is positive for the stock market and may encourage more fund inflows to Asian countries such as South Korea and Taiwan. Such flows are supporting the currencies. |
The trend will be a stronger yen through to the end of this month. Strong stocks are drawing flows of overseas money into Japanese assets. |
When interest rates increase, they have a capital loss. During a time of ECB rate increases, Japanese investors don't want to buy European bonds. |