Title: Dollar index edges nearer to 100, set for best week in four
Apr 08, 2022 12:55AM ET
The dollar continued its inexorable rise on Friday, hitting a new two-year high against a basket of equivalent currencies and a one-month high against the euro, supported by the prospect of more aggressive interest rate hikes by the Federal Reserve.
The dollar index rose as high as 99.904 in early Asian trade, its highest level since May 2020, and was last quoted at 99.890.
The index is up 1.3% for the week, which would be the biggest increase in a month. This is supported by aggressive comments from several Federal Reserve policymakers calling for a faster pace of rate hikes to curb rapid inflation.
Minutes from the Fed's March meeting released this week showed that "many" participants were ready to raise rates in 50 basis point increments in the coming months.
On the other hand, the euro fell 0.18% on Friday to a fresh one-month low of $1.0855, weighed down by fresh Western sanctions against Russia, with the European Union working toward a ban on Russian coal that is set to take effect in August.
The common currency was also dragged down by uncertainty over the outcome of the French election, with far-right candidate Marine Le Pen gaining in the polls and threatening incumbent Emmanuel Macron's re-election hopes. The polls, however, continue to see Macron ahead.
The dollar extended gains against the Japanese yen, rising slightly to 124.23, its highest level in more than a week and approaching last month's seven-year high of 125.1.
The pound was at the lower end of its recent range at $1.30675.
In cryptocurrency markets, bitcoin traded slightly higher at around $43,600, just below its two-week low of $42,742.