Dollar Gains on Outlook for Higher Rates By Christina Fincher LONDON (Reuters) - The dollar rose to one-month highs against the euro and yen on Wednesday, extending gains after the U.S. central bank signaled it may step up the pace of interest rate rises to counter inflation. The Federal Reserve raised rates for a seventh consecutive time on Tuesday, saying inflation pressures had picked up and price stability would only be balanced with appropriate policy action. "The Fed statement reflected the growing unease with price pressures so they gave a slightly more hawkish assessment. The market reacted with a rally in the dollar," said Kristjan Kasikov, foreign exchange strategist at Calyon. The Fed's upbeat assessment of the U.S. growth prospects contrasted with a survey by Germany's Ifo institute showing business confidence fell for a second consecutive month in March. The euro, which fell sharply against the dollar on Tuesday, extended losses to $1.3019, bringing its losses to four cents in little over a week. The dollar also rose to one-month highs above 105.70 yen and 1.1948 Swiss francs. "The Ifo survey is contributing to the fall in euro/dollar, but the prime driver remains the repercussions from yesterday's FOMC statement," said Niels From, senior FX strategist at Danske Bank in Copenhagen. He added that upcoming U.S. consumer price data could be crucial to the dollar's next move, with a strong number putting more pressure on the Fed to raise interest rates. CAN IT LAST? Stronger economic growth and rising interest rates in the United States have lifted the dollar four percent against the euro and three percent against the yen since the start of January, interrupting a three-year slide driven the worries over the U.S. deficits. But many analysts reckon the impact of higher interest rates may have only a short-term boost to the dollar "This week has been all about positive dollar sentiment, driven by the outlook for rising interest rates but next week the focus may well have shifted back to the deficit issue," said Neil Mellor, currency strategist at Bank of New York.     Continued ... Quelle "Dollar Gains on Outlook for Higher Rates" : reuters.com Main page for "Dollar Gains on Outlook for Higher Rates"