Investing.com - The dollar edged higher and continued to hover at a 14-year peak against the other majors currencies on Wednesday, as investors awaited the release of U.S. data later in the day, amid ongoing optimism over the strength of the economy.
The greenback remained supported amid expectations that President-elect Donald Trump’s plans to ramp up fiscal spending and cut taxes will spur economic growth and inflation.
Faster growth would spark inflation, which in turn would prompt the Fed to tighten monetary policy a faster rate than had previously been expected.
The U.S. dollar has also been boosted by bets that the U.S. central bank will almost certainly raise interest rates next month.
Fed Chair Janet Yellen on Thursday reiterated that a rate hike “could well become appropriate relatively soon.”
EUR/USD slipped 0.16% to 1.0608, still close to Friday’s 11-month trough of 1.0579.
Research group Markit earlier reported that its euro zone composite purchasing managers’ index, which measures the combined output of both the manufacturing and service sectors, increased to 54.1 November from the prior month’s reading of 53.3 and above forecasts for no change.
The German manufacturing PMI slipped to 54.9 this month from 55.0, while the services PMI climbed to a six-month high of 55.0 from 54.2.
Markit also said its French manufacturing PMI declined to a two-month low of 51.5 in November from 51.8 the previous month, while the services PMI rose to a two-month high of 52.6 from 51.4.
Elsewhere, GBP/USD slid 0.34% to 1.2382.
USD/JPY fell 0.15% to 110.99, after hitting a six-month high of 111.40 on Monday, while USD/CHF held steady at 1.0116.
The Australian dollar was higher, with AUD/USD up 0.35% at 0.7427, while NZD/USD edged down 0.10% to 0.7054.
Meanwhile, USD/CAD was little changed at 1.3447.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.08% at 101.17, still close to last Friday’s 14-year peak of 101.54.