NEW YORK: The US dollar was broadly higher on Tuesday and was on course for its steepest gain against the euro in more than a month following hawkish comments from Federal Reserve officials, while European political uncertainty also boosted the dollar.
Cleveland Fed President Loretta Mester said late on Monday she would be comfortable raising rates at this point if the economy maintained its current performance, while Market News International quoted Philadelphia Fed President Patrick Harker as saying that a March rise was on the table.
Investors were awaiting more speeches from Harker and San Francisco Fed President John Williams on Tuesday and remarks later in the week from Fed Board Governor Jerome Powell, Atlanta Fed President Dennis Lockhart and Dallas Fed President Robert Kaplan.
"The market is concerned that they're all going to have the same tone, which is mildly more hawkish than the February statement," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York.
Solid economic data and rises in US inflation have led Fed policymakers including chair Janet Yellen to promise a rise in rates soon.
The euro was on course for its biggest one-day percentage decline against the dollar since Jan. 18. Against the yen, the dollar was up 0.5 percent at 113.64 yen, putting it on track for its biggest one-day gain against the Japanese currency in 12 days.
Concerns over anti-European Union rhetoric from French presidential candidate Marine Le Pen and Dutch candidate Geert Wilders ahead of the first round of French elections on April 23 and the Netherlands' March 15 parliamentary election combined with the hawkish Fed statements to send the euro as much as 0.8 percent lower to a six-day trough of $1.0526.
"We're starting to see that political risk...growing," said Alfonso Esparza, senior currency strategist at Oanda in Toronto. "The fact that there's an anti-European Union probability for France has the euro weaker against the dollar."
The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.5 percent at 101.460 after hitting a six-day high of 101.600 earlier.
The euro fell to 8.8014 Norwegian crowns, its lowest since July 2015 as oil, one of Norway's main sources of revenue, gained 1.5 percent.
Comments
Comments are closed.