October 16, 2021

Dollar hits one-year high as traders anticipate US interest rate rises

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The US dollar on Thursday traded at its strongest level in a year against major currencies as traders banked on persistent inflation driving the Federal Reserve closer to its first pandemic-era interest rate rise.

The dollar index, which measures the US currency against six others including the euro and British pound, hit its highest level since September last year, following days of choppy trading after central bank officials signalled the end of ultra-supportive monetary policies.

Headline inflation in the US is running at about a 13-year high after economies reopened from last year’s shutdowns, creating supply chain bottlenecks.

The Fed last week raised its inflation forecasts and indicated that it would reduce its $120bn a month of bond purchases…

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