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The dollar is set to record its best weekly performance in nearly 5 months against major currencies on Friday, amid bets that the US Federal Reserve will raise interest rates early, after data this week showed the fastest pace of inflation in the United States in 3 decades.
The dollar index, which measures the performance of the US currency against 6 currencies, recorded a new peak, the highest in 16 months, at 95.256, heading towards recording a weekly gain of 1.08%, the highest since June 20.
The euro fell again to a 16-month low of $1.1439, and the British pound fell to $1.33565, the lowest this year.
Data on Wednesday showed a sharp rise in US consumer prices (inflation) last month at the fastest annual pace since 1990, raising doubts about the Federal Reserve’s view that price pressures will be “temporary” and fueling speculation that policymakers will raise interest rates sooner than expected.
The dollar rose to 114.265 yen on Friday, marking a one-week high.
It also reached a two-and-a-half-week high of 0.9224 Swiss francs for the second day in a row.
The risk-sensitive Australian dollar, on the other hand, fell to $0.7283 for the first time in more than a month.
Its New Zealand counterpart fell to $0.7005, a level not seen since Oct. 14.
