FOREX-Dollar gains after strong data points to rate hike

FOREX-Dollar gains after strong data points to rate hike

The dollar rose slightly against its peers on Wednesday as recent strong economic data eased fears of a recession but heightened fears that US interest rate hikes Federal Reserve to fight inflation could last longer.

* Surveys released on Tuesday showed business activity in the United States unexpectedly picked up in February, hitting its highest level in eight months.

* St. Louis Fed Chairman James Bullard said the Fed must keep inflation on a sustainable path toward its 2% target this year or risk a repeat of the 1970s when rates had to be noted several times.

* “The release of stronger-than-expected U.S. data since the start of the month has bolstered Fed messages on higher interest rates longer.”

* The dollar index rose 0.1% to 104.19, not far from the six-week high of 104.34 hit earlier in the session.

* The pound was down 0.2% at $1.2082, giving back much of the day’s gains, while the euro was down 0.03% at $1.0644.

* Investors’ attention is now turning to the release later today of the minutes of the Fed’s latest meeting, which could offer better insight into policymakers’ plans.

* In early February, the release of a US jobs report was the trigger for the dollar’s rally, which was helped by a string of strong data.

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