Investing.com - The dollar rose to its highest level since December against a currency basket on Wednesday ahead of the Federal Reserve’s decision on monetary policy later in the day.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.14% to 92.43 by 10:31 AM ET (14:31 GMT), the strongest level since December 28.
Demand for the dollar continued to be underpinned after data showing that U.S. private employers added 204,000 jobs in April, slightly higher than economists' expectations. The upbeat jobs data cemented expectations for a June rate hike by the Fed.
While the Fed is expected to keep interest rates on hold after its meeting later Wednesday policymakers are widely expected to line up their next rate hike in June against the backdrop of a strengthening U.S. economy.
The dollar edged up to fresh three month highs against the yen, with USD/JPY last at 109.91
The euro fell to fresh four month lows, with EUR/USD down 0.18% o 1.1972.
The single currency came under pressure after data showed that growth in the euro zone economy slowed in the first quarter, underlining that case for the European Central Bank’s caution in removing stimulus.
Another report showed that activity by euro zone manufacturers cooled in April, but still remained solid.
The pound was hovering above four-month lows, with GBP/USD last at 1.3611 after a report showing that activity in the UK construction sector rose at the fastest pace in five months in April.
The report did little to alter investor expectations that the Bank of England will leave interest rates unchanged at its upcoming meeting next week after overall economic growth slowed to near stagnation in the first quarter.