The United States of America dollar, on Wednesday, May 23, surged to a six-month high against the euro as data indicating a slowdown in European business activity hurt the common currency, while broader risk aversion hurt the dollar against the Japanese yen.
The dollar index .DXY, which measures the greenback against a basket of six other currencies, was up 0.4 percent at 93.982, after rising as high as 94.116, its strongest since December 12.
The greenback slipped 0.85 percent against the Japanese yen, on pace for its worst day since late March, a day after U.S. President Donald Trump tempered optimism over progress made in trade talks with China.
The yen tends to rise in times of market turbulence since Japan is the world’s largest creditor nation and traders tend to assume Japanese investors would repatriate funds at times of crisis, Reuters reports.
Investors are looking to the release later on Wednesday of the minutes of the Federal Reserve’s most recent meeting, when it kept interest rates steady.
In its post-meeting statement issued in early May, the Fed also said inflation had “moved close” to its target and that “on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium term.”
“We want to see the voice behind this optimism and what was the thinking behind it,” said Ng.
Meanwhile, sterling fell to a 2018 low after weaker-than-expected UK inflation cast doubt on whether the Bank of England will raise interest rates this year.
The Canadian dollar weakened to a more than one-week low against its U.S. counterpart as stocks and oil prices slipped.
