Yahoo Finance Forex- U.S. Dollar Rallies To Five-Month High
Investing.com - The dollar gained steam on Friday, reaching a new five-month high.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rallied 0.17% to 93.55 as of 10:50 AM ET (14:50 GMT).
The dollar has surged over 1% this week, as bond yields jumped to a seven-year high. The yield on the benchmark United States 10-Year Treasury note dipped to 3.078 after hitting an overnight high of 3.126.
The rise in bond yields, along with positive economic data and rising inflation, has boosted expectations that the Federal Reserve will increase interest rates and tighten monetary policy.
The Fed raised rates in March and is expected to raise rates twice more, with some investors expecting a third hike.
Expectations of higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
The dollar fell against the safe haven yen, with USD/JPY decreasing 0.06% to 110.70 after rising earlier in the session amid inflation reports that failed to meet Japan’s 2% inflation target.
The euro was down amid political uncertainty in Italy, with EUR/USD falling 0.23% to 1.1768, while sterling was near a one-week low, with GBP/USD down 0.32% to 1.3473.
Meanwhile, the Canadian dollar fell as inflation rose by 2.2% in April. USD/CAD was up 0.69% to 1.2892.
Elsewhere, the Australian dollar was lower, with AUD/USD down 0.01% to 0.7510 while NZD/USD increased 0.49% to 0.6911.
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