U.S. Dollar at One Week High on Rates

The dollar hovered near its highest in over a week against a basket of major currencies on Wednesday as the market’s focus shifted from Greece to prospects for higher U.S. interest rates.

The dollar index eased 0.1 percent to 95.298. On Tuesday it had climbed to 95.636, its highest level since June 12.  The dollar index still held on to the bulk of the gains made on Tuesday, when it climbed 1.2 percent – its best daily performance since late May.  The euro edged up 0.2 percent to $1.1184, regaining a bit of ground after sliding 1.5 percent on Tuesday.

The market seems to be shifting its focus back to underlying factors such as the divergence in the monetary policy stances of the Fed and the European Central Bank, said Mitul Kotecha, head of Asia-Pacific FX strategy for Barclays in Singapore.