The euro rose to the highest level this year against the dollar as inflation in the currency bloc exceeded analysts’ estimates, damping speculation the European Central Bank will add to monetary stimulus next week.
The yen climbed the most in three weeks against the dollar as reports that Russian President Vladimir Putin put fighter jets on combat alert amid rising tensions in Ukraine boosted demand for less-risky assets.
The dollar rose the most against the euro this month as new-homes sales unexpectedly rose last month, boosting speculation Federal Reserve Chair Janet Yellen will reiterate the central bank’s plan to continue to cut bond-buying when she testifies before a Senate panel tomorrow.
The dollar rose the most against the yen this year as the Bank of Japan maintained its monetary stimulus while Federal Reserve officials backed reductions to bond-buying even as winter weather slows U.S. economic growth.
To foreign-exchange strategists, 2014 was to be the year the dollar broke free from the Federal Reserve’s currency-depressing policies and appreciated the most since the global financial crisis. Then came the snow.