The pound advanced to the strongest level in 5 1/2 years against the dollar this week as bets the Bank of England is moving closer to increasing its benchmark interest rate fueled demand for the U.K. currency.
The Turkish central bank’s resistance to the deep interest-rate cuts demanded by Prime Minister Recep Tayyip Erdogan is shoring up its independence as policy makers keep the taming of inflation their top priority.
The $5.3 trillion foreign-exchange market rejected the European Central Bank’s unprecedented effort to weaken the euro, sending the 18-nation currency higher and providing a further headwind to manufacturers already coping with a slowing economy.
The dollar may rise after today’s meeting of the U.S. Federal Open Markets Committee, as policy makers “open the door” to further monetary easing without taking any immediate action, said Henrik Gullberg , a currency strategist at Deutsche Bank AG in London.
Norway’s krone will gain further as investors “desperate” for protection against a deepening European debt crisis turn to one of the few haven markets that isn’t overvalued, said Deutsche Bank AG, the world’s biggest currency trader.