EUR/USD Drops to 1.3260 on Fed Rates Bets

The dollar was near an 11-month high versus the euro as traders increased bets that the Federal Reserve will raise interest rates by July.

A gauge of the U.S. currency against major peers was close to the highest in six months before central bankers meet at an annual symposium in Jackson Hole, Wyoming. Minutes yesterday of the Fed’s July meeting showed many policy makers raised the possibility they may boost rates sooner than anticipated. The Aussie was the strongest in eight months versus the kiwi before the release of private data on Chinese manufacturing.

“The Fed minutes were more hawkish than investors expected, and that caused dollar buying to accelerate” said Tomohito Katagiri, an analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services. “Because the U.S. currency has surged so quickly, further gains could come slower. But at the moment, I can’t find any reason to sell the dollar.”

Bloomberg

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