The dollar held gains against most major peers from yesterday before the Federal Reserve concludes a two-day meeting after data yesterday enhanced prospects policy makers will raise rates sooner than investors expect.
The Bloomberg Dollar Spot Index closed at the highest level in a week yesterday after a measure of U.S. inflation accelerated faster than forecast. The yen was near a one-week low after a report showed Japan’s exports fell for the first time in 15 months. New Zealand’s dollar pared declines after Auckland-based Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, said whole milk powder prices rose for the first time in nine auctions.
“The stronger than expected consumer price data dragged U.S. yields and dollar higher,” Estuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. in New York. “There’s a risk that the market may overreact should there be hawkish undertones from the Fed’s economic forecast and statement with the backdrop that inflation is picking up somewhat.”
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