The dollar climbed to a 14-month high on speculation financial markets are underestimating the pace of U.S. interest-rate increases and investors sought a refuge before a vote on Scottish independence this month.
The pound slumped the most since July 2013 against the dollar after a poll said Scottish independence supporters gained on opponents before a Sept. 18 vote. The euro declined after dropping for an eighth week Sept. 5 in the longest losing stretch in its 15-year history, and South Africa’s rand fell to a one-month low. The yen reached the weakest level since 2008 as data added to signs Japan’s economy is losing momentum.
“The Fed papers that came out today suggest the market perhaps has lower expectations” of the rate-increase pace than the central bank does, said Jennifer Vail, head of fixed income at U.S. Bank Wealth Management in Minneapolis. “The dollar is getting strength as probability increases on Scotland independence. The U.K. may run into some economic uncertainties.”