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Forex - Dollar hits multi-year highs against euro, yen

Published 03/10/2015, 03:38 AM
© Reuters.  Dollar index rallies amid diverging monetary policy outlook
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Investing.com - The dollar rose to 11-and-a-half year peaks against the euro on Tuesday and touched eight-year highs against the yen as the monetary policy outlook between the Federal Reserve and central banks in Europe and Japan continued to diverge.

EUR/USD touched lows of 1.0785, the weakest since September 2003 and was last at 1.0807, 0.41% lower for the day.

Demand for the dollar continued to be underpinned after the latest U.S. jobs report solidified expectations for higher interest rates.

The Fed is expected to begin raising interest rates around the middle of this year and investors were looking ahead to next week’s policy statement to see if it would drop its reference to being patient before raising rates.

In contrast the European Central Bank confirmed that it started asset purchases under its trillion-euro quantitative easing program on Monday.

The Bank of Japan expanded it stimulus program in late October amid concerns that falling oil prices could lower the inflation outlook.

USD/JPY hit highs of 122.03, the most since July 2007 and was last at 121.73.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit highs of 11-year highs of 98.18 on Tuesday.

Elsewhere, the euro edged higher against the yen, with EUR/JPY edging up to 131.64 from 131.52 late Monday and was at seven-year lows against sterling, with EUR/GBP hitting lows of 0.7154 overnight.

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