Investing.com – The U.S. dollar rose to four-month highs against a basket of the other major currencies on Wednesday, as the yield on the U.S. 10-year bond held above 3% after breaching the level for the first time in four years on Tuesday.
The , which measures the greenback’s strength against a basket of six major currencies, rose 0.42% to 90.95 by 08:20 AM ET (12:20 GMT), its highest level since January 12.
The dollar was boosted by rising U.S. yields and the prospect of a faster pace of rate hikes by the Federal Reserve this year.
Expectations of higher interest rates make the dollar more attractive to investors seeking yield. The yield on rose above 3% for the first time since early 2014 on Tuesday, a sign of confidence in the outlook for the U.S. economy.
Upbeat data on U.S. new home sales and consumer confidence on Tuesday underlined expectations that the economy will continue to grow in the coming months.
The dollar rose to fresh two-and-a-half month highs against the yen, with up 0.34% to 109.18.
The euro fell to two month lows against the dollar, with down 0.39% to 1.2185.
Investors were looking ahead to the European Central Bank’s monetary-policy meeting on Thursday to gauge whether officials are growing more confident on the inflation outlook.
The pound approached its recent five-week lows, with losing 0.25% to trade at 1.3941.
The Australian and New Zealand dollars plumbed fresh four-month lows, with down 0.55% to 0.7561 and off 0.69% at 0.7069.
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