The dollar looked set to record its longest winning streak since 1967 after the Federal Reserve announced that it will phase out its monetary policy measures in 2015.
The U.S. dollar index rose for the 10th consecutive week, the most since March 1967, the fourth year of President Lyndon Johnson’s term. The yen touched a six-year trough after the Bank of Japan signaled it will continue with its stimulus program in order to curb deflation.
The dollar rose up to 0.7 percent to trade at 109.46 yen, its strongest level since August 2008. It later eased to 108.97 yen, a gain of 0.3 percent. It has advanced 1.5 percent over the past five days. The U.S. currency rose 0.7 percent to $1.2835 per euro, up 1 percent since Monday. It touched $1.2831, its strongest level since July 2013. The euro fell 0.4 percent to trade at 139.86 yen.
“It tells you the dollar has been so depressed over the last few years, and now that depression is unwinding, like a coiled spring,” Douglas Borthwick, a New York-based head of foreign exchange at brokerage Chapdelaine & Co., told Bloomberg News. “The Dollar Index will continue to stay bid as long as the Japanese continue to make motions of quantitative easing while Europe makes more noise about expanding their balance sheets.”
The U.S. Dollar Index rose 0.5 percent to 84.753 as of 2:51 p.m. in New York. The index, which is compiled by Intercontinental Exchange Inc, rose to 84.783, its strongest level since July 2010 as it looked set to record a 0.6 percent advance this week. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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