The dollar has been trading at one-and-a-half week highs against a currency basket on Today following overnight gains after minutes of the Federal Reserve’s January meeting underlined expectations for faster hikes in U.S. interest rates.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 90.11 by 08:01 GMT after earlier hitting a high of 90.17, the most since February 12.
The index has now risen around 2% after falling to a three year low of 88.15 last week.
The minutes of the Fed’s Jan. 30-31 policy meeting showed that policymakers growing confidence in the U.S. economy bolstered their plans to continue raising short-term interest rates as soon as next month.
“A majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate,” the minutes said.
The euro was at its lowest level against the dollar since February 12, with EURUSD last at 1.2270 at 08:13 GMT after ending the previous session down.
But the dollar was lower against the yen, with USDJPY down to 107.34.
Demand for the safe haven yen was boosted as expectations for a faster pace of monetary tightening by the Fed dented equities, souring risk appetite.
Investors tend to seek out the yen in times of market turbulence as the currency is backed by Japan’s current account surplus, which offers it more resilience than currencies of deficit-running countries.
The euro was also lower against the yen, with EURJPY down to 131.74. at 08:14 GMT.
The pound lost ground against the dollar, with GBPUSD falling to a one-week low of 1.3880.