Dollar hovers at fresh 2-week highs vs. rivals

© Reuters.  Dollar index at new 2-week highs on rate hike hopes© Reuters. Dollar index at new 2-week highs on rate hike hopes

 

Investing.com – The dollar was hovering at fresh two-week highs against the other major currencies on Tuesday, as fresh hopes for an upcoming rate hike by the Federal Reserve continued to lend support to the greenback.

EUR/USD slipped 0.18% to 1.1168, close to Monday’s two-week low of 1.1155.

The greenback remained broadly supported after Fed Chair Janet Yellen said at the Jackson Hole symposium on Friday that the case for U.S. interest rate hikes has “strengthened” in recent months due to improvements in the labor market and to expectations for solid economic growth.

However, she did not indicate when the Fed would act, saying that higher interest rates will depend on incoming economic data.

Speaking shortly afterwards, Fed Vice Chair Stanley Fischer said Yellen’s speech was “consistent” with expectations for possibly two more rate hikes this year, opening the door to a September hike.

GBP/USD fell 0.19% to 1.3080, re-approaching Monday’s two-week trough of 1.3056.

The Bank of England earlier reported that net lending to individuals increased by £3.8 billion in July, compared to expectations for a £4.9 billion rise. Net lending to individuals increased by £5.1 billion in June, whose figure was revised from a previously estimated gain of £5.2 billion.

USD/JPY gained 0.38% to 102.31, while USD/CHF added 0.20% to 0.9799.

Also Tuesday, data showed that the KOF economic barometer for Switzerland ticked down to 99.8 in August from 103.5 in July, whose figure was revised from a previously estimated 102.7. Analysts had expected the index to slip to 102.0 this month.

In Japan, official data showed that household spending fell by an annualized rate of 0.5% in July, compared to expectations for a 0.9% decline and after a 2.2% drop the previous month.

The Australian and New Zealand dollars were weaker, with AUD/USD down 0.22% at 0.7551 and with NZD/USD shedding 0.21% to 0.7237.

Markets shrugged off a report by the Australian Bureau of Statistics saying that building approvals increased by 11.3% in July, beating expectations for a 0.5% fall. Building approvals dropped 4.7% in June, whose figure was revised from a previously estimated 2.9% decline.

Elsewhere, USD/CAD rose 0.15% to trade at 1.3031, close to the previous session’s two-and-a-half week peak of 1.3049.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.23% at 95.74, after hitting a fresh two-week high of 95.83 earlier in the session.

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