Betting on Raising Interest Rates Supports The Dollar

The dollar rose to an eight-day high on Friday after US inflation rose to a 40-year high and statements from a Federal Reserve official launched a wave of bets on a major hike in US interest rates.

At the same time, the euro, which rose last week, is heading for its biggest weekly decline after European Central Bank President Christine Lagarde said in an interview that raising interest rates now will not reduce the record level of inflation in the euro area, but will only harm the economy.

And the dollar rose against a basket of currencies to its highest level since February 3 to 96.058, and in its latest transactions, it recorded an increase of 0.1 percent to 95.917.

The euro fell 0.4 percent against the dollar to $1.1383, after touching a three-month high in the previous session.

The Pound rose 0.4 percent against the euro to 83.96 pence as markets assessed the Bank of England to raise interest rates by another 25 basis points next month.