NEW YORK/LONDON: The dollar edged higher on Monday after the April survey of business activity in New York state rose for the first time in five months and bolstered expectations the Federal Reserve will raise interest rates in May.

The dollar index, a measures of the currency against six major peers, rose 0.443% after the Empire State Manufacturing index shot to 10.8 from -24.6 in March, far higher than expectations of -18 in a Reuters poll of 35 economists.

The new orders index rose 47 points to 25.1, while the shipments index added 37 points to 23.9, substantial increases after they had declined in recent months, the Federal Reserve Bank of New York said.

The euro slid 0.71% to $ 1.0921 after hitting a one-year high of $1.108 on Friday. Traders expect further interest rate hikes from the European Central Bank.

The yen weakened 0.45% at 134.39 per dollar as the Bank of Japan stuck to its easy-money policies, helping the greenback rise to its highest level since March 15.

Sterling was last trading at $1.237, down 0.35% on the day.

The Mexican peso lost 0.51% versus the dollar to trade at 18.12, while the Canadian dollar fell 0.31% versus the greenback to 1.34 per dollar.