© Reuters. Dollar firm near 5-month highs, euro below $1.18
Investing.com – The dollar was holding steady near five month highs against a currency basket on Thursday supported by rising U.S. government bond yields, while the euro remained below the 1.18 level amid concerns over political developments in Italy.
The , which measures the greenback’s strength against a basket of six major currencies, was steady at 93.28 by 03:22 AM ET (07:22 AM GMT), within close reach of Wednesday’s five month peaks of 93.52. The index is up around 0.93% so far this week.
The recent rise in the dollar has been fueled by a surge in U.S. government bond yields to multi-year highs.
The yield on rose as high as 3.117% overnight, the highest level since 2011. Bond yields move inversely to prices.
Yields have climbing higher since the Federal Reserve said at its May meeting that inflation is moving closer to its 2% target.
The Fed raised rates in March and projected two more rate hikes this year, although many investors see three hikes as possible.
The euro remained on the back foot, with last at 1.1793, after plumbing a low of 1.1762 on Wednesday, a level not seen since December 19.
Sentiment on the single currency has been hit by concerns about the formation of a , that investors worry could increase the changes of the country exiting the euro.
The dollar advanced against the yen, with rising 0.18% to 110.59, a level not seen since January 23.
The pound was a touch higher, with last at 1.3508, off an overnight high of 1.3569.
Sterling was boosted by a report in Britain’s Telegraph newspaper that the UK will tell Brussels it is prepared to stay in the European Union’s customs union beyond 2021.
The Australian dollar pushed higher, with rising 0.17% to 0.7526, while the New Zealand dollar dipped, with easing 0.1% to 0.6886, off an overnight high of 0.6937.
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