Investing.com – The dollar rose against a basket of major currencies buoyed by rising bond yields amid comments from Goldman Sachs suggesting that the Federal Reserve is poised to adopt more hawkish stance on monetary policy at its meeting this week.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.53% to 89.34.
Goldman Sachs said it expects the Federal Reserve bank to adopt a slightly hawkish slant in its commentary related to economic conditions and inflation, when the central bank releases its policy statement due Wednesday.
That stoked investor expectations for a more hawkish outlook on US rates, sending while boosting the greenback. Markets have priced in three rate hikes this year, the first of which is widely expected in March.
Also supporting the greenback were mostly bullish economic data as the benefit of tax reform – which has triggered a host of companies to issue employee wage hikes and bonuses – was believed to have boosted personal income, spurring a rise in spending.
The Commerce Department said on Monday consumer spending, which accounts for more than two-thirds of U.S. economic activity, in December after an upwardly revised 0.8% rise in the previous month.
Personal income in December after rising 0.3% in the previous month, while the savings rates hit a 10-year low, prompting some analysts to warn that a rebound in savings would weigh on consumer spending in the first quarter of 2018.
Pantheon said the savings rate can’t keep falling, and expects “spending will likely rise less quickly in first quarter.”
fell 0.48% to $1.2366 despite hawkish commentary from European Central Bank Governing Council member Klaas Knot suggesting that the central bank end its quantitative easing programme as “soon as possible.”
fell 0.71% to $1.4061, while rose 0.46% to Y109.09
rose 0.24% to $1.2337 as a slump in oil prices has continued to weigh on the loonie.
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