Dollar Jumps To 22-Month Peak Versus Euro

Washington (Sept 25)   The dollar surged to its highest in nearly two years versus the euro Thursday amid mounting speculation that the Federal Reserve will hike interest rates ahead of schedule.

Policy makers are talking about tightening despite some discouraging US economic data.

Figures from the  Commerce Department  showed orders for US durable goods declined by a record 18.2% in August, after posting a sharp 22.5% increase in the preceding month.

A separate report said initial jobless claims climbed to 293,000, an increase of 12,000 from the previous week's revised level of 281,000.

The Fed may begin hiking interest rates as early as the spring of 2015,  Richard Fisher  , president of the Federal Reserve Bank of  Dallas  said today.

"It's assumed in the market place that we'll start our liftoff in raising interest rates some time between the spring and the summer," Fisher said at a conference in  Rome  .

"I won't say what we're saying internally, that would not be appropriate, but maybe sooner rather than later," he said.

Meanwhile,  Bank of England Governor Mark Carney  said the  UK  central bank may also be getting closer to raising interest rates.

Speaking at an actuaries' conference in  Wales  , Carney said, "With many of the conditions for the economy to normalize now met, the point at which interest rates also begin to normalize is getting closer."

The dollar rose to  USD1.2698  versus the euro, its highest in 22 months. The dollar has jumped about  13 cents  from its lowest in April.

The buck improved a bit to  USD1.63  versus the sterling despite Carney's hawkish comments.

Early losses took the dollar to  Y108.70  versus the yen, down a bit from a recent 6-year peak above  Y109  .

Source:  RTTnews