The dollar rose to the highest level in four months as signs the world’s biggest economy is recovering fueled speculation the Federal Reserve will keep cutting monetary stimulus.
The U.S. currency climbed from an almost two-week low against the euro as reports showed a measure of manufacturing and the producer-price index rose and the Fed saw “moderate” growth across most of the country last month. The 18-member shared currency fell against most major peers after a German report showed growth probably slowed. South Africa’s rand weakened a third day as a manufacturing gauge declined, while Australia’s dollar had the biggest two-day loss in a month.
“PPI basically surprised to the upside, and immediately the dollar rallied like there’s no tomorrow,” David Woo, head of global rates and currencies at Bank of America Merrill Lynch, said in a phone interview. “It’s the single biggest story.”
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