The United States Dollar climbed to a three-week high against a basket of currencies on Tuesday, June 20 after an influential Federal Reserve official said U.S. inflation would pick up as wages improved, bolstering bets on the Fed continuing to raise interest rates.
The dollar index, which measures the greenback against six other major currencies, including sterling – edged up to 97.623, its highest since the end of May.
The greenback got a further lift on Tuesday when Bank of England Governor Mark Carney said now was not the time to raise British interest rates, sending sterling down more than half a percent against the U.S. currency.
New York Fed President William Dudley said on Monday that tightening in the labour market should help drive up inflation, reinforcing the message that a recent patch of weak data is unlikely to derail plans to keep raising interest rates.
Separately, Chicago Fed President Charles Evans said on Monday it may be worthwhile for the U.S. central bank to wait until year-end to decide whether to raise interest rates again.
Investors are now pricing in around a 50-percent chance that rates will be raised again by the end of the year according to CME FedWatch.
Against the yen, the dollar rose to as high as 111.90, its strongest level since May 26. That marked a gain of almost 3 percent from the dollar’s near 2-month low of 108.81 yen set on June 14. The greenback last stood at 111.67 yen, up 0.1 percent on the day.
