Dollar Rises to 11-Month High Before Fed Minutes
The dollar strengthened to an 11-month high versus the euro before the Federal Reserve releases the minutes of its July meeting, amid speculation policy makers are moving toward raising borrowing costs.
A gauge of the U.S. currency rose to a six-month high before Fed Chair Janet Yellen speaks at Jackson Hole, Wyoming on Aug. 22. Goldman Sachs Group Inc. said it expects further gains in the dollar as money flows out of Europe. The pound strengthened against all of its 31 major peers after the Bank of England said two officials voted for an increase in interest rates at the Aug. 6-7 policy meeting. New Zealand’s dollar declined on speculation economic growth is waning.
“The dollar was appreciating of late based on rising expectations of the Fed turning a little less dovish,” said Manuel Oliveri, a foreign-exchange strategist at Credit Agricole SA’s corporate and investment banking unit in London. “The focus is shifting to Friday’s speech by Yellen and Jackson Hole. There is the notion in the market that she may turn less dovish. That’s one of the reasons why the dollar is in demand.”
The dollar gained 0.3 percent to $1.3279 per euro as of 7:05 a.m. in New York, after appreciating to $1.3275, the strongest level since Sept. 13. The U.S. currency climbed 0.4 percent to 103.32 yen after reaching 103.41, the most since April 7. The euro rose 0.1 percent to 137.21 yen.
The ForexSQ Dollar Spot Index, which tracks the greenback against 10 major currencies, advanced 0.2 percent to 1,025.66. The gauge earlier rose to 1,026.13, the highest since Feb. 7.
The euro may weaken below $1.30 by year-end, Credit Agricole’s Oliveri said.