USD At Its Strongest Level in Six Weeks on US Rebound

by on July 29, 2014 11:35 am BST

Interest rate increases may come “sooner and be more rapid than currently envisioned” if the labor market continues to improve more quickly than anticipated, Fed Chair Janet Yellen told lawmakers this month.

The dollar touched the strongest level in six weeks against a basket of currencies ahead of this week’s Federal Reserve policy review.

The dollar index, which measures the greenback’s value against a basket of major currencies, held steady at 81.059. It had risen to 81.084 late last week, its highest level since early February.

The euro eased about 0.1 percent to around $1.3432, pinned near an eight-month trough of $1.3421 set on Friday.

The dollar held firm versus the yen, edging up 0.1 percent to about 101.99 yen.

Besides the Fed policy meeting and U.S. jobs data, euro zone inflation and PMI surveys for China and the euro zone later this week are also on investors’ radar.

The Fed is seen likely to cut its monthly bond-buying programme by another $10 billion as it looks to wind up the scheme later in the year, but the focus for markets is on any clues to the timing of the first interest rate hike.