U.S. Dollar Near Five Year High after Fed

A gauge of the dollar was 0.1 percent from a five-year high amid speculation the Federal Reserve will raise interest rates next year after policy makers removed a pledge to keep borrowing costs low for a “considerable time.”

The U.S. currency gained versus 11 of its 16 major peers after strengthening yesterday when Fed Chair Janet Yellen said rates would probably be increased gradually once economic parameters were met. South Korea’s won slid against all its most-active counterparts after the yen weakened yesterday. Australia’s dollar rose from a nine-year low versus New Zealand’s. A gauge of currency volatility climbed for a ninth day. Russia’s ruble snapped a seven-day slide.

“The Fed meeting clarified that rate hikes will start by mid-next year, giving a big boost to the dollar,” said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. in New York. “The Fed indicated that the decline in oil will boost spending more than hurt inflation.”

Bloomberg

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