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The euro held near a one-month high against the dollar and a six-month peak against the pound, supported by statements that tend to tighten monetary policy by policymakers at the European Central Bank, and after data that showed inflation at its highest level in ten years and in light of indications that the Federal Reserve Not in a hurry to tighten policies.
The dollar has fallen over the past two weeks as doubts creep in about when the US Federal Reserve will begin to scale back its stimulus.
US Central Bank President Jerome Powell said last Friday that the job recovery will determine the timing of the reduction in asset purchases.
Comments by Powell and other dovish US central bank policymakers, as well as less-than-expected data, have caused the US currency index to lose about 1.4%against a basket of currencies since hitting a nine-month high on August 20.
By 0800 GMT, the index had fallen slightly to 92.452, not far from a four-week low of 92.376 touched in the previous session after data on private-sector jobs and surveys on the manufacturing sector.
Conversely, the Euro saw a positive data flow, including strong growth in manufacturing activities and inflationary pressures from supply chain crises.
The single currency traded just below a one-month high of $1.1857, buoyed by data that showed inflation rose 3% year on year in August, the highest level in ten years and well above the European Central Bank’s 2% target and forecast by Reuters. at 2.7%.
The euro also advanced against the rest of the currencies, reaching 130.44 yen on Wednesday, its highest level in a month and touching a six-week peak against the pound sterling at 86.02 pence.
But it struggled to rise above $1.18, probably because the European Central Bank’s expectations indicated that asset purchases would continue until an increase in interest rates became necessary.
Movements in the currency market are limited ahead of the US non-farm payrolls data due on Friday, while the yen hit 110 against the dollar and the Australian dollar reached a two-week high of $0.73890.
