Investing.com - The dollar rose to fresh 11-month highs against a basket of the other major currencies on Wednesday as investors continued to contemplate the outlook for a U.S. interest rate hike and increased fiscal spending once Donald Trump enters the White House.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit overnight highs of 100.34, a level not seen since December 2015 and was last at 100.25.
If the index climbs above the highs of 100.51 set in December 2015, it would reach its highest level since April 2003.
The dollar has been boosted by expectations that the Federal Reserve is on track to raise interest rates next month.
Better-than-expected U.S. retail sales data on Tuesday strengthened the case for a rate hike.
Investors are currently pricing a 90.6% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.
Expectations for higher rates typically boost the dollar by making it more attractive to yield seeking investors.
Many investors also believe that Trump's campaign pledges to increase fiscal spending, cut taxes and loosen financial regulation will lead to a pickup in economic growth and inflation.
Faster growth and inflation would also prompt the Fed to tighten monetary policy a faster rate than had previously been expected.
The dollar hit fresh five-month highs against the yen, with USD/JPY rising 0.34% to 109.56.
The euro fell to fresh eight-month lows, with EUR/USD slipping to 1.0704.
The pound pushed higher, with GBP/USD edging up to 1.2476 as investors’ awaited the UK jobs report for October due out later in the day.