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UPDATE 3-Dollar rallies as data support future U.S. rate hikes.

The America's Intelligence Wire

| September 15, 2004 | COPYRIGHT 2003 Financial Times Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

(From CBS Marketwatch (Stories))

Byline: ALAN CLENDENNING

CHICAGO (CBS.MW) - The dollar rallied Wednesday as stronger-than-expected U.S. factory data all but sealed a Federal Reserve interest-rate increase next week and boosted the odds for future hikes.

"The catalyst to today's sharp dollar rally is the little observed New York Fed manufacturing index, [which posted] the highest percentage gain since February 2002," said Ashraif Laidi, chief currency analyst with MG Financial Group.

In late-day U.S. trading the dollar was up 0.7 percent against Europe's shared currency, when compared to its value in late U.S. trading on Tuesday. The euro was quoted at $1.2155.

The greenback rose 0.4 percent against the Japanese yen at 110.05 yen.

The Federal Reserve meets next Tuesday and is widely expected to nudge its…

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