Date
24 October 2017
The US dollar has risen in 10 of the last 11 sessions versus the Japanese yen. Photo: Reuters
The US dollar has risen in 10 of the last 11 sessions versus the Japanese yen. Photo: Reuters

Dollar climbs to seven-month high on expected rate hike

The US dollar soared to a seven-month high against major currencies on expectations the Federal Reserve will raise interest rates in December amid solid US economic data.

Sterling continued its downward trek after a “flash crash” last Friday, with investors concerned about the impact of a “hard exit” by Britain from the European Union.

Over the past week, the British pound has lost more than 4 percent of its value against the dollar.

In the US, investors are looking to Wednesday’s release of the latest Fed monetary policy meeting’s minutes for confirmation of the market’s December rate hike view.

The rate futures market has attached a roughly 70 percent probability the Fed will lift rates at the December meeting

That pushed benchmark U.S. 10-year yields to a more than four-month high, elevating the dollar against the yen, the currency pair most sensitive to moves in the US government bond market.

The greenback has risen in 10 of the last 11 sessions versus the Japanese currency.

The euro also had a major technical breakdown against the strengthening dollar on Tuesday, dashing a nearly two-month consolidation pattern, analysts said.

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RA

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