Yahoo Finance Dollar Hits 1-Year Highs, Euro Falls below $1.16
Investing.com - The dollar hit one-year highs against a currency basket on Thursday, sending the euro below the $1.16 level after bullish comments be Federal Reserve Chairman Jerome Powell cemented expectations for two more rate hikes this year.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.52% to 95.33 by 07:25 AM ET (11:25 AM GMT), the strongest level since July 13, 2017.
Demand for the dollar continued to be underpinned after Fed Chairman Jerome Powell gave an upbeat assessment of the U.S. economy during congressional testimony on Tuesday and Wednesday, and downplayed the impact of uncertainty over U.S. trade policy on the outlook for additional rate hikes.
The euro was pressured lower by the stronger dollar, with EUR/USD losing 0.44% to trade at 1.1588.
The dollar was higher against the yen, with USD/JPY adding on 0.14% to trade at 113.00, near Wednesday’s six-month highs of 113.13.
Sterling fell to fresh 10-month lows against the U.S. currency, with GBP/USD down 0.67% to 1.2988.
The pound remained on the defensive as unexpectedly weak UK retail sales data earlier in the day further diminished chances for an August rate hike by the Bank of England after a soft inflation reading on Wednesday.
Sterling has also been hit by a fresh bout of Brexit uncertainty with Prime Minister Theresa May facing criticism from both sides of the Brexit divide over her strategy for leaving the European Union.
The pound was also lower against the euro, with EUR/GBP ticking up 0.22% to 0.8926, not far from the four month highs of 0.8931 set on Wednesday.
Meanwhile, the Chinese yuan fell to a fresh one year low against the dollar as concerns over trade tensions continued to build.
The currency, which is usually closely controlled by Beijing, fell to 6.7971 in offshore trading.
The move lower has prompted speculation that Chinese policymakers are allowing their currency to weaken in order to offset the impact of U.S. trade tariffs, by making their exports more competitive.
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