The dollar gained versus all its major counterparts after Federal Reserve policy makers indicated they’ll probably raise interest rates by the middle of next year with the U.S. economy showing signs of strengthening.
The euro rallied to a two-month high against the dollar after European Central Bank President Mario Draghi said inflation is expected to rise gradually, damping bets policy makers will introduce further monetary stimulus.
The euro rallied for a fifth week as European Central Bank President Maro Draghi said he expects inflation in the currency bloc to gradually rise, damping bets that policy makers would reduce the benchmark interest rate.
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 fell to a three-week low after U.S. employers added fewer jobs than forecast last month, raising speculation the Federal Reserve may slow the pace of reduction in bond buying amid signs of uneven economic growth.
The dollar rose for a seventh day, its longest rally in eight months, amid speculation reports on jobless claims and housing prices will reconfirm the Federal Reserve’s decision to trim monthly bond purchases.