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The dollar index rose to 100 points for the first time in nearly two years on Friday, boosted by prospects of an acceleration in US interest rates.
The dollar rose against a basket of rival currencies over the past month, especially against the euro, which has come under pressure due to investor concerns about the economic costs of the war in Ukraine and the presidential elections in France, which is witnessing a fierce competition.
The dollar index climbed to a high of 100 points in early European trading hours, its best performance since May 2020. It later lost some momentum and settled in the most recent trading at 99.876.
The index rose 1.4 percent this week in its biggest increase in a month, supported by statements inclined to tighten monetary policy from many policy makers at the Federal Reserve (the US central bank) who are calling for a faster pace of raising interest rates to curb inflation.
The euro fell to a new one-month low of $1.0848. It was last down 0.2% at $1.0865.
Thursday’s ECB meeting minutes indicated that policy makers are keen to combat inflation but the euro zone has so far taken a more cautious stance than other central banks, which has weakened the euro.
The dollar extended its gains against the Japanese yen, recording 124.23, the highest level in more than a week, close to its best performance in seven years at 125.1 recorded last month.
The yen has stabilized this month after falling in March, but remains under pressure as the US raises interest rates and the Bank of Japan intervenes in the bond market to keep rates low.
The pound fell against the US currency, falling 0.2 percent in the latest trading, recording $1.30475.
In the cryptocurrency markets, bitcoin rose one percent to about 43,890 dollars.
