Dollar Near 2-Week High

The dollar traded near its highest in two weeks against the euro in Asia after Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said a consistent pick-up in inflation ``will require more aggressive policy.'' The president of Fed's New York branch, Timothy Geithner, also said yesterday policy makers would do what is ``necessary to curb inflation,'' a day after Fed Chairman Alan Greenspan suggested he was willing to abandon the bank's commitment to raising rates at a ``measured'' pace. ``Investors are starting to look into the chance the Fed will steer itself toward more aggressive rate increases,'' said Hiroyuki Yamada, who manages $1 billion in overseas debt at Daiwa SB Investments Ltd. in Tokyo. ``That's increasing the dollar's appeal for now because of higher rates'' dollar-denominated debt will offer. Against the euro, the dollar was at $1.2038 at 8:36 a.m. in Tokyo from $1.2049 late yesterday in New York, according to EBS, an electronic foreign-exchange dealing system. It traded as high as $1.2023, the strongest since May 25. The yen may gain against the euro on expectations Japan's machinery orders in April rose for the first time in two months, as a recovery in the world's second-largest economy picks up.