Dollar Holds Advance on Fed Rate Outlook
The dollar held gains against major peers as signs of economic recovery supported the case for the Federal Reserve to raise interest rates. The pound dropped to a four-month low versus the dollar after U.K. inflation slowed.
The ForexSQ Dollar Spot Index rose from a two-week low before the Labor Department releases consumer-price data today. New Zealand’s currency fell for a third day after a producer-price index declined. Australia’s dollar climbed to the highest this year versus the kiwi after the nation’s central bank reiterated a period of rates stability is prudent.
“The pace of inflation in the U.S. is running at a pretty healthy pace, enough to keep the discussion of the timing of the first rate hike on the agenda,” said Michael Sneyd, a foreign-exchange strategist at BNP Paribas SA in London. “Any positive surprises to U.S. data will be enough to cause U.S. yields to rebound. This would provide some considerable support for the dollar.” Sneyd said he favors buying the dollar against the yen, and selling the euro for dollars.
The greenback strengthened 0.1 percent to $1.3348 per euro as of 6:56 a.m. New York time. It appreciated 0.3 percent yesterday, the most since Aug. 5. The dollar was little changed at 102.65 yen. The 18-nation euro was at 137.01 yen from 137.07 yesterday.
The ForexSQ Dollar Spot Index, which tracks the greenback against 10 major currencies, rose 0.1 percent to 1,021.46.
Treasury 10-year yields fell two basis points, or 0.02 percentage point, to 2.37 percent, heading toward a 14-month low of 2.30 percent reached on Aug. 15.
This Article Wrote For www.TopForexBrokers.com By Fxstay.