NEW YORK: The dollar surged on Wednesday to a fresh 10-1/2-month peak against rival currencies, boosted by increased expectations for a reduction in the U.S. Federal Reserve’s asset purchases by the end of the year and an interest rate hike, possibly in late 2022.

The dollar index - which measures the U.S. currency against a basket of six major currencies - rose for the fourth consecutive day, to 94.112, its highest since early November last year. It was last up 0.4% at 94.115.

The greenback was also unfazed, even as U.S. Senate Republicans on Tuesday blocked a bid by President Joe Biden’s Democrats to head off a potentially crippling U.S. credit default, with federal funding due to expire on Thursday and borrowing authority on around Oct. 18.

The euro was among the currencies to lose ground, falling to a nearly 11-month low of $1.1630. It last traded down 0.5% at $1.1631.

The yen showed little reaction to the election of Fumio Kishida as leader of Japan’s ruling Liberal Democratic Party that put him on course to become the country’s next prime minister.