Investing.com – The dollar rose to a more than three-month high against a basket of major currencies as U.S. bond yields resumed their trend higher.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.45% to 90.96 to remain close to its intraday high of 91.02.
The edged higher after topping 3% for the first time in four years yesterday amid investor expectations for a continued uptick in inflation, economic growth and Federal Reserve interest rate increases.
Wells Fargo said Wednesday US bond yields were still “poised to move higher,” supported by faster growth, rising inflation and a steadily hiking Fed.
“With real GDP accelerating in the coming quarter and core inflation reaching 2% around the same time, we believe the Fed will hike three more times this year.” Wells Fargo said Wednesday in a weekly note to clients.
Also supporting the rally in the dollar was a slump in the euro as traders appeared to cut their bets the European Central Bank will adopt a more hawkish outlook on monetary policy tightening at its meeting slated for Thursday.
fell 0.42% to $1.2181.
fell 0.23% to $1.3945 after struggling to hold gains above $1.24 amid reduced investor optimism for a May Bank of England rate hike in the wake of weaker data and less hawkish comments from BoE governor Mark Carney.
rose 0.45% to Y109.31, while rose 0.28% to C$1.2869 as the latter pair was supported by weakness in the oil prices.
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