© Reuters. The dollar is advancing for the account of the Fed
Investing.com – The greenback was at its highest level in five months Wednesday, as investors look to the minutes of the meeting of the federal Reserve.
The dollar index, which measures the greenback’s strength versus a weighted basket based on the trade of six major currencies, was up 0.42% to 93,90 at 11h09 (15h09 GMT).
Investors will look to the minutes of the meeting of the Fed at 14.00 ET (18.00 GMT) for any signs of monetary policy tightening.
A recent rise in bond yields, coupled with the economic data positive and rising inflation, has strengthened forecasts that the federal Reserve will increase interest rates and will tighten the monetary policy.
The Fed has raised its rates in march and is expected to increase its rates two times more, some investors are expecting a third increase. Expectations of rising interest rates tend to boost the dollar, making the currency more attractive for investors in search of yield.
During this time, the euro and the pound sterling continued to decline to their lowest levels after five months, after disappointing economic data.
The euro was close to a low of five months after the growth of the private sector in the euro-zone has reached its slowest pace in 18 months in may. The report is likely to push back expectations of an interest rate increase by the european central Bank. The euro is down, with EUR / USD down 0.65% to 1,1703.
During this time, the pound slumped after data showed that annual inflation slowed in April, which could ease pressure on the Bank of England to increase interest rates. The decline in the GBP / USD is 0.69% to 1,3340.
The dollar is declining against the yen and the refuge, with the USD / JPY down 0.64% to 109,96. Elsewhere, the australian dollar was lower, with a drop of 0.46% to 0,7540 for the AUD / USD, while the NZD / USD was down 0.48% to 0,6900.