* Year-end flows, Fed expectations lift greenback
* Fiscal worries about Greece weigh on euro
* Euro recovers from earlier 9-month low vs Swiss franc
* SNB intervention jitters remain
(Updates prices, adds comment, details)
By Wanfeng Zhou
NEW YORK, Dec 21 (Reuters) - The dollar rose to a more than
six-week high versus the yen on Monday as expectations the U.S.
economy is reviving encouraged investors to bet the Federal
Reserve will raise interest rates sooner rather than later.
The euro stayed near its weakest level in more than three
months against the dollar, pressured by lingering concerns
about the fiscal health of Greece.
Solid figures on the U.S. job market and retail sales
earlier this month have prompted talk the U.S. economy may
recover sooner than the euro zone and Japan, helping the dollar
maintain its upside momentum.
"We have a lot of traders who want to book profits this
week before the end of the year," said Greg Salvaggio, senior
vice president of capital markets at Tempus Consulting in
Washington.
"There's also a belief that the U.S. economy is recovering
at ... a much more rapid pace than many people have previously
thought," he added. "As a result, traders are a little bit
anxious about the possibility of a shift in the Fed's interest
rate policy next year."
The Fed reiterated earlier this month interest rates will
remain low for "an extended period." Charles Evans, president
of the Chicago Federal Reserve Bank, said on Monday that to him
"extended period" means about three to four meetings.
In an interview with business television channel CNBC, he
also said low inflation will give the central bank room to keep
monetary policy easy for an extended period []
Most U.S. primary government securities dealers expect the
Fed to hike rates by the end of the first quarter of 2011, with
only the most optimistic seeing an increase during the second
quarter of 2010, according to a Reuters poll. See
[].
The dollar climbed as high as 91.01 yen <JPY=>, according
to Reuters data, the highest level since early November. It
last traded at 90.93 yen, up 0.7 percent on the day.
The euro fell 0.2 percent to $1.4318 <EUR=>, close to
Friday's low of $1.4262 set on electronic trading platform EBS,
its weakest since Sept. 4.
The euro has fallen sharply from levels above $1.50 as
recently as Dec. 4, pressured by concerns about the fiscal
health of some countries on the euro zone periphery following
recent rating agency downgrades on Greek debt.
There is no risk of a euro-zone country defaulting on its
debt, European Central Bank Governing Council member Athanasios
Orphanides was quoted on Monday as saying. See
[].
FRANC RETREATS
Meanwhile, the euro recovered most losses against the Swiss
franc after tumbling to a nine-month low overnight when traders
took advantage of thin liquidity to push it quickly through
stops below 1.49 Swiss francs.
The euro was last down 0.1 percent at 1.4937 francs
<EURCHF=>. It had earlier crashed through stops below 1.4900
francs to hit a nine-month low of 1.4826 on EBS.
Investors have been testing the resolve of the Swiss
National Bank after it subtly altered its intervention stance
earlier this month, saying it would act only to counter an
"excessive" appreciation of the franc versus the euro.
But investors continued to worry about the chances of
intervention. In earlier trade, the franc fell sharply against
the dollar and the euro, with traders saying a large
dollar/Swiss franc buy order by a commercial bank triggered
unconfirmed talk of SNB action.
The SNB and Bank for International Settlements, which has
acted for the SNB in the past, declined comment.
"Euro/Swiss has reached quite low levels and it could be an
indication that the SNB is not targeting specific levels as
such," said Sverre Holbek, Danske Bank strategist in
Copenhagen.
"This may allow the currency to slip a bit further than
we've seen previously, but we still don't think they are ready
to abandon their intervention in the currency market just
yet."
(Editing by Andrew Hay)
