Dollar at a six-month high

Published: 30 Jul at 9 AM Tags: Euro, Dollar,

The US dollar has hit a six-month high against other currencies as investors turn away from the euro. The greenback has been given a boost by expectations that the Federal Reserve could soon announce a hike in interest rates and that the second quarter will show stronger growth than the first.

The dollar index is up 0.2 per cent to 80.208 after climbing as high as 81.245. The euro is close to an eight-month trough at $1.3404. Last November the single currency dropped as low as $1.3295.

The euro is managing to hold steady against the yen at 136.93, whereas the dollar has managed to pull past the 102.00 mark. Analysts are predicting a second-quarter growth of around 3.0 per cent in the US economy. This is in contrast to the 2.9 per cent contraction recorded in the first quarter. Much of the blame for this is being shouldered by a harsh winter.

The dollar is at a six-week high against its Canadian rival at C$108.66. Conversely sterling is at its lowest level in six weeks at $1.6933.

The New Zealand dollar is also struggling and hit $0.8495 earlier, the lowest the kiwi has been in seven weeks after Fonterra , the dairy giant, cut supplier’s forecast payouts for the new season.