The dollar rose against most of its major peers on signs the U.S. economy is gaining momentum, supporting the case for Federal Reserve to scale back stimulus.
The Bloomberg Dollar Spot Index rose for a sixth day before the Federal Open Market Committee meets Jan. 28-29. The euro pared a four-day slide versus the yen before data forecast to show the outlook for business confidence in Germany, Europe’s largest economy, rose to the highest level in almost eight years. New Zealand’s dollar was supported after the nation’s inflation accelerated more than economists forecast, backing the case for the Reserve Bank to tighten policy.
“The odds are still firmly to upside for the U.S. dollar near term,” said Stan Shamu, the Melbourne-based market strategist at IG Ltd. “I think we’ll continue to see a gradual improvement in the U.S. economy. There’s definitely an aggressive shift in Fed commentary more in favor of tapering in the near term.”
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