Home Economy Dollar holds near one-year high amid bets for earlier Fed rate hike

Dollar holds near one-year high amid bets for earlier Fed rate hike

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TOKYO: The held near a one-year high versus major peers on Wednesday, amid rising expectations the Federal Reserve will announce a tapering of stimulus next month, potentially following with interest rate hikes by mid-2022.

Three Fed policymakers said overnight that the U.S. economy has healed enough to begin to scale back the central bank’s asset-purchase programme, including Vice Chair Richard Clarida.

Money markets now price about a 50-50 chance of a rate increase by July.



The dollar index, which measures the greenback against six rivals, eased slightly to 94.460 from Tuesday, when it touched 94.563 for the first time since late September 2020.

A surge in energy prices has fuelled inflation concerns and stoked bets that the Fed may need to move faster to normalise policy than officials had projected, sending two-year Treasury yields to their highest in more than 18 months overnight.

Higher U.S. yields helped push the dollar to a three-year high…

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