The U.S dollar, on Wednesday, February 15, spiked for the 11th straight day, after Federal Reserve Chair Janet Yellen flagged a possible interest rate rise next month during upbeat comments on the U.S. economy.
The dollar notched up its longest winning streak in almost five years after Yellen said on Tuesday the Fed would probably need to raise rates at an upcoming meeting and that delaying could leave the central bank’s policymaking committee behind the curve.
The dollar index against a basket of major currencies chalked up its longest winning streak since May 2015. It was up 0.2 percent at 101.220 .DXY, near a four-week high of 101.380 scaled overnight.
Yellen’s remarks rekindled expectations in some quarters for the Fed to raise rates three times in 2017 rather than twice. The futures market did not share this view amid doubts about the U.S. economy’s ability to sustain three hikes.
According to CME Group’s FedWatch data, U.S. interest rate futures FFZ7 implied an around 30 percent chance of at least three increases this year, little changed from the previous day – though the chance rose above 40 percent immediately after Yellen’s comments.
The greenback was a shade higher at 114.40 yen JPY= after rising to a two-week high of 114.50 the previous day, while the euro slipped to a one-month low of $1.05525 EUR=.
The dollar was supported as U.S. Treasury yields rose on the Fed Chair’s comments, with the benchmark 10-year yield US10YT=RR climbing four basis points to an 11-day high of 2.50 percent the previous day. They were last at 2.475 percent.
The stronger dollar, which puts non-U.S. buyers of dollar-denominated commodities at a disadvantage, weighed on crude oil prices.
