The dollar headed for an eighth straight month of gains against major peers after signs U.S. inflation may rebound revived speculation the Federal Reserve has scope to raise interest rates.
A gauge of the greenback erased losses for February, climbing to within 0.1 percent of a record closing high Thursday after a greater-than-forecast increase in so-called core inflation offset concern that overall consumer prices tumbled last month. Fed Chair Janet Yellen told Congress this week that short-term declines in inflation are linked to the plunge in crude-oil prices and are likely to prove temporary.
“Everyone had pre-positioned for a pretty weak CPI,” said Matt Derr, a foreign-exchange strategist in New York at Credit Suisse Group AG. “Even if it wasn’t a huge surprise, it was enough to get that unwound. Things moved pretty aggressively after Yellen’s testimony.”