* Sterling wallows below overnight lows
* Dollar gains vs yen, pushes toward last week's highs
* Market awaits Fed minutes, Yellen speech this week
* Kiwi, Aussie tumble on dovish RBNZ
TOKYO, Oct 11 The dollar firmed on Tuesday,
while the beleaguered sterling wallowed near recent lows on
lingering fears about the impact on Britain from exiting the
European Union and the kiwi tumbled on dovish comments from a
New Zealand central bank official.
Japanese, Canadian and some U.S. markets were closed on
Monday for holidays.
The dollar index, which tracks the greenback against a
basket of six major rivals, added 0.1 percent to 97.024.
"The U.S. dollar's grind higher continues, clearly linked to
changing Fed rate hike expectations," said Sue Trinh, head of
Asia FX strategy at Royal Bank of Canada in Hong Kong.
"A little over three weeks ago, we had expectations of a
December rate hike at under 50 percent, and now we're pushing
towards 70 percent," she said. "So the onus is on the data now,
to continue printing firmly."
Market participants were pricing in around a 70 percent
chance that the Fed will raise rates in December, according to
CME Group's FedWatch program.
Investors awaited Wednesday's release of minutes of the
Federal Reserve Open Market Committee's September meeting for
clues as to how close the Fed is to hiking interest rates.
Speaking to reporters after a speech in Sydney, Chicago Fed
President Charles Evans said on Tuesday that he "could be fine"
with the Fed raising rates in December, but he wanted to see how
the economy and inflation progressed before deciding.
Evans does not have a vote this year on Fed policy but
participates fully in deliberations and will become a voting
member in 2017.
"At the end of the day, it's a dollar strength story, and
after that, it's currency positioning. That's really the driving
factor," said Bart Wakabayashi, head of Hong Kong FX sales at
State Street Global Markets.
Sterling, meanwhile, was down 0.3 percent against the
dollar at $1.2324, below its overnight low of $1.2345, in
the wake of Friday's "flash crash" that sent it hurtling to its
lowest levels in 31 years.
"Economic data does not help very much to explain sterling's
movement. The fact of the matter is that the UK has fared well
in the three and half months since the referendum," wrote Marc
Chandler, global head of currency strategy at Brown Brothers
"The depreciation of sterling will have an impact on the UK
current account balance," he said. "It will be reduced, but do
not be surprised if it comes from reduced volume of imports as
much as an increase in value of exports."
Japanese current account data released earlier on Tuesday
showed the nation's surplus stood at 2.0 trillion yen ($19.3
billion) in August as the trade balance swung to a surplus due
to falling imports.
The dollar was last up 0.3 percent against the yen at
103.93 yen, shy of last week's high of 104.17 but above
Monday's low of 102.80 yen.
The euro edged down slightly to at $1.1133.
The New Zealand dollar tumbled 1 percent to $0.7063
after falling as low as $0.7062, its weakest since July 28,
after the country's central bank bluntly warned that further
policy easing would be needed to push inflation
The Australian dollar hit a three-week low of
$0.7540 and was last down 0.7 percent at $0,7553, falling in
sympathy with the kiwi and as its U.S. counterpart strengthened
on expectations of an interest rate hike by the Fed as early as
(Reporting by Tokyo markets team; Editing by Eric Meijer & Shri