Forex – Dollar at 1-1/2 Week Highs after Fed Minutes

© Reuters. Dollar at 1-1/2 week highs after Fed minutes – The dollar was trading at one-and-a-half week highs against a currency basket on Thursday following overnight gains after minutes of the Federal Reserve’s January meeting underlined expectations for faster hikes in U.S. interest rates.

The , which measures the greenback’s strength against a basket of six major currencies, was at 90.11 by 03:01 AM ET (08:01 AM GMT) after earlier hitting a high of 90.17, the most since February 12.

The index has now risen around 2% after falling to a three year low of 88.15 last week.

The minutes of the Fed’s Jan. 30-31 policy meeting showed that bolstered their plans to continue raising short-term interest rates as soon as next month.

“A majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate,” the minutes said.

The euro was at its lowest level against the dollar since February 12, with last at 1.2276 after ending the previous session down 0.46%.

But the dollar was lower against the yen, with down 0.29% to 107.45.

Demand for the safe haven yen was boosted as expectations for a faster pace of monetary tightening by the Fed , souring risk appetite.

Investors tend to seek out the yen in times of market turbulence as the currency is backed by Japan’s current account surplus, which offers it more resilience than currencies of deficit-running countries.

The euro was also lower against the yen, with down 0.37% to 131.89.

The pound lost ground against the dollar, with falling 0.24% to a one-week low of 1.3884.

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