Dollar hits four-month high on euro as markets bet on earlier Fed taper
The dollar climbed against major peers on Monday, reaching a four-month high versus the euro, as traders positioned for an earlier tapering of Federal Reserve stimulus.
The greenback strengthened as far as $1.1742 to the single currency , extending a 0.6% pop from Friday, when a strong U.S. jobs report stoked bets that a reduction in asset purchases could start this year and higher interest rates could follow as soon as 2022.
The dollar index , which tracks the U.S. currency against six rivals, rose to a two-week top 92.915.
The dollar also hit an almost two-week high of 110.37 yen .
The dollar index is eyeing a close above 93, while the currency could head for $1.1704 per euro, Weston wrote, adding that it could climb further versus the yen too should U.S. yields continue to tick higher.
The benchmark 10-year Treasury yield jumped 8 basis points on Friday to a two-week high of 1.3053%. There was no trading in Tokyo on Monday with Japan shut for a national holiday. Singapore markets were also closed.
The Fed has made the labor market recovery a condition of tighter monetary policy, and most officials back the view that a jump in inflation will prove transitory, though there is debate over how prolonged it could be.
Traders will be keenly watching a U.S. consumer price report on Wednesday.
Last week, Fed Vice Chair Richard Clarida suggested that conditions for hiking interest rates might be met as soon as late 2022.
Reference: Reuters
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