U.S. Dollar Takes Breather near Two Month High

The dollar hovered near a two-month high against a basket of major currencies on Thursday, taking a pause after rallying due to a shake-out of long positions in sterling and a drop in the euro.

The dollar index eased 0.1 percent to 80.490, staying within sight of Wednesday’s high of 80.581, its highest level since early April. A break above 80.599, the April 4 peak, will take the index back to highs not seen since mid-February.

The euro edged up 0.1 percent to $1.3604, holding slightly above a three-month low of $1.3587 set on Wednesday.  Expectations of some policy action from the European Central Bank (ECB) have been mounting, a key reason for the recent underperformance in the euro. A Reuters poll of 48 economists showed a clear majority expect the ECB to cut its deposit rate into negative territory next week.

Reuters

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