The Dollar Index climbed to the highest level in almost three years amid speculation the Federal Reserve is moving closer to ending its program of asset purchases on signs U.S. economic growth is improving.
The Canadian dollar declined to a two-month low versus its U.S. counterpart after the annual inflation rate fell in April to its slowest in more than three years, bolstering the case for lower interest rates.
Treasuries declined after a measure of consumer confidence in May reached an almost six-year high and an index of leading economic indicators topped forecasts, as Federal Reserve officials debate the pace of asset purchases.
Canada’s annual inflation rate fell in April to its slowest in more than three years, taking it below the central bank’s target band and adding to evidence of growing slack in the world’s 11th largest economy.
The U.S. economy will continue to recover until at least 2015 without tumbling into a recession, achieving the sustained growth that has eluded it since the last slump ended four years ago, according to a Bloomberg poll.