SINGAPORE, May 29 Reuters The dollar held firm on Monday supported by growing expectations of further rate hikes by the U.S. Federal Reserve, though news that a debt ceiling deal had been finalised drew some of the safe haven bids away from the greenback.

The U.S. dollar notched a fresh sixmonth high of 140.91 yen in early Asia trade before reversing some of those gains to last trade at 140.39 yen. It was on course for a monthly gain of about 3 against the Japanese currency.

The yen39;s renewed decline has come on the back of rising U.S. Treasury yields, as bets grow that interest rates in the United States would stay higher for longer.

Data released on Friday showed that U.S. consumer spending increased more than expected in April and inflation picked up, adding to signs of a stillresilient economy.

Yields on U.S. Treasuries jumped on the back of the data, with the twoyear yield , which typically reflects nearterm interest rate expectations, rising to an over twomonth high of 4.639 on Friday.

Cash U.S. Treasuries were untraded in Asia on Monday, owing to the Memorial Day holiday in the United States, while futures were broadly steady. Tenyear futures39; implied yield was 3.84.

The UK market is similarly closed on Monday for a holiday.

Against the dollar, the euro edged 0.02 higher to 1.0735, while sterling slipped 0.01 to 1.23495.

Whether the dollar sustains the rally that we39;re seeing, I think it39;ll depend on particularly the wages data, or average earnings…