UNITED STATES (OBSERVATORY) – The dollar rose to a two-year high against a basket of currencies on Friday on the back of a rise in US bond yields as the pound fell after disappointing economic data and comments from the Bank of England’s governor indicate that interest rate hikes It will not be fast.
The euro fell below $ 1.23 and was heading for the biggest weekly drop in two months as investors tended to trim their benchmark highs ahead of next week’s ECB meeting as policy makers are largely expected to show no sign of a change in monetary policy.
Commodities linked to commodities were pressured by the decline in Chinese equities, with the Australian and New Zealand dollars hitting their lowest levels in at least two weeks.
The yield on two-year US bonds was 2.453 percent on Friday, the highest since September 2008, as a result of hawkish comments by some Federal Reserve officials. The yield on longer-term bonds jumped as rising commodity prices bolstered US inflation.
By 1404 GMT, the dollar index, which tracks the movement of the greenback against a basket of six major currencies, rose 0.5 percent to 90.39 after touching a two-week high.
The euro hit $ 1.2264, the lowest level in a single European currency in two weeks, heading for the biggest weekly drop in two months.
Sterling fell 0.4 percent to $ 1.4030, heading for a weekly loss of 1.4 percent, the biggest in 10 weeks.
Sterling fell on weaker-than-expected retail and inflation data and comments by Bank of England Governor Mark Carney on Thursday that traders interpreted as less of a commitment by the bank to raise interest rates in May due to “mixed” economic data released recently.