The Dollar Index rose as traders increased bullish bets on the U.S. currency amid speculation the Federal Reserve will provide further guidance on plans to scale back asset purchases.
The gauge advanced toward the three-year high reached yesterday before Fed Chairman Ben S. Bernanke speaks tomorrow, the same day minutes of the central bank’s June meeting are due. The yen slid versus all of its major peers before Bank of Japan officials meet this week. Australia’s dollar weakened as traders increased bets the nation’s Reserve Bank will reduce interest rates next month as China’s economy slows.
“As the dollar is being bid, the euro is looking heavy,” said Masashi Murata, a currency strategist in Tokyo at Brown Brothers Harriman & Co. “It’s possible the FOMC minutes will provide hints of a reduction in quantitative easing,” Murata said in reference to the Federal Open Market Committee.