U.S. Dollar Near Two Month Highs after Fed

The dollar held at two-month highs against a basket of major currencies early on Friday, having extended gains as the market shifted its focus to an eventual hike in U.S. interest rates.  The dollar index .DXY stood at 97.618, having risen as far as 97.756. A break above 97.775 will take the index back to highs last seen in April.

The greenback scaled a near one-month peak of 124.205 yen JPY=, while the euro struggled at $1.0884 EUR=, not far off a 7-1/2 week low of $1.0855 set overnight.  The dollar index was up nearly 2 percent in a week that saw Federal Reserve Chair Janet Yellen reiterate that U.S. interest rates will probably be lifted later in the year.

“The message that ‘a rate hike this year makes sense’ kept USD as an outperformer overnight,” Greg Moore, senior currency strategist at RBC Capital Markets wrote in a note to clients.  Bank of England Governor Mark Carney also drew the market focus back onto global interest rates just as worries about Greece were fading.