Dollar Surges Ahead of Scheduled Release of Fed’s Minutes

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Dollar Surges Ahead of Scheduled Release of Fed’s MinutesThe dollar rose versus most of its emerging-economy counterparts on bets that Federal Reserve’s latest minutes may reveal the central bank will raise interest rates soon.

The U.S. currency rose 0.5 percent to trade at $1.1349 per euro at 11:48 a.m., New York time, after declining over the past three weeks. Greece readied itself for a request for a six-month debt extension on Thursday. The dollar remained slightly unchanged at 119.19 yen, after advancing 0.7 percent on Tuesday.

The Malaysia’s ringgit recorded its biggest decline in nearly a month as the Indonesia’s rupiah slid after the nation’s central bank caught the market off guard by unexpectedly slashing interest rates on Tuesday. The greenback has advanced since the Federal Reserve’s January meeting in which top officials confirmed they will still tighten policy, albeit slowly, despite strong growth in employment figures.

“Whenever you’ve had the Fed tightening, you’ve had emerging-market crises,” Marc Chandler, a New York-based global head of currency strategies at Brown Brothers Harriman & Co., told Bloomberg News. “If you look at what’s happened in the last six months, there’s been no emerging-market currency that’s up against the dollar.”

The ringgit dropped 1.1 percent to steady at 3.62 per dollar, while the rupiah plunged 0.9 percent to 12,870 per dollar. The Colombia’s peso fell 0.7 percent to 2,433.18 per dollar while the Romanian leu declined 0.5 percent to trade at 3.9189 per dollar.

Most other emerging-market currencies tumbled on speculation increasing U.S. rates may draw away investment from the riskier developing nations to the United States, where investors believe is much safer for storing their money. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com