The dollar climbed against most other leading currencies on Tuesday after Federal Reserve chief Janet Yellen championed continuing loose US monetary policies to boost employment and stagnant wages. The British pound jumped to a multi-year high against the dollar, meanwhile, as inflation data encouraged speculation Britain will raise interest rates sooner than other big economies.
The US dollar index, which weighs the greenback against six currencies, was up 0.24 percent to 80.382 in late trading, versus a 0.02 percent decline shortly before the US government reported a 0.2 percent rise in retail sales in June. Gains in the dollar index widened as Yellen spoke to a congressional panel in Washington. "The comments of Chair Yellen were very much in line with her previous comments and showed that hers and the view of the FOMC (policy-making Federal Open Market Committee) on the economy have not changed that signifcantly," said currency strategist Brian Daingerfield of RBS Securities in Stamford, Connecticut.
The dollar stood at 101.67 yen, up 0.15 percent and very near the trading day's high. The euro fell to a three-week low against the dollar, dropping to $1.3560, after Germany's ZEW survey of economic sentiment suggested a shaky start for Europe's largest economy in the third quarter. The euro last traded off 0.4 percent at $135.67. The euro was also down 0.25 percent against the yen at 137.93 yen and 0.75 percent weaker against the British pound.
The British pound, which outperformed after data showed a jump in UK inflation, traded up 0.35 percent against the dollar at $1.7145 after earlier matching a nearly six-year high of $1.7192. Consumer prices rose 1.9 percent on the year in June, the Office for National Statistics said, beating expectation for a 1.6 percent reading.
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