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Dollar hits three-week high

Written by Business World, on 20th Jun 2017. Posted in World

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The dollar hit a three-week high against a basket of currencies on Tuesday, after an influential Federal Reserve official said U.S. inflation would pick up as wages improved, bolstering bets on the Fed continuing to raise interest rates.

The greenback got a further lift on Tuesday when Bank of England Governor Mark Carney said now was not the time to raise British interest rates, sending sterling down more than half a percent against the U.S. currency.

The dollar index - which measures the greenback against six other major currencies, including sterling - edged up to 97.623 , its highest since the end of May.

New York Fed President William Dudley said on Monday that tightening in the labor market should help drive up inflation, reinforcing the message that a recent patch of weak data is unlikely to derail plans to keep raising interest rates.

Separately, Chicago Fed President Charles Evans said on Monday it may be worthwhile for the U.S. central bank to wait until year-end to decide whether to raise interest rates again.

Against the yen, the dollar rose to as high as 111.90 , its strongest level since May 26. That marked a gain of almost 3% from the dollar's near 2-month low of 108.81 yen set on June 14.

The greenback last stood at 111.67 yen, up 0.1% on the day.

The greenback has edged higher since the Fed on June 14 raised interest rates for a second time in 2017 and announced it would begin cutting its holdings of bonds and other securities later this year, while indicating that a recent softening in inflation was seen as transitory. (Reuters)

Source: www.businessworld.ie

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