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