Dollar index hits highest level since 2003

Published: 2 Mar at 9 PM Tags: Euro, Dollar,

The dollar index has hit its highest level in 11 years as the euro surrenders early gains against its US rival. The greenback has been doing well because of a positive economic outlook in the US and expectations that the Federal Reserve is soon to hike interest rates.

Following initial gains the single currency has settled at around $1.12. The dollar is also at a three-week peak against the yen and was last trading at 120.07 yen in New York. The dollar index, an indication of how the greenback is performing against a raft of its major rivals, is up 0.14 per cent to 95.427. The index had previously risen as high as 95.505.

The euro has found some support from a quantitative easing programme due to be introduced later in the month by the European Central Bank. A news conference is due to be held later in the week where policymakers will outline the bank’s plans.

A rate cut in China has hit the Australian dollar, which is down around 0.40 per cent against the greenback. The Chinese rate cut had boosted the US dollar in early trading this week.

Last week’s change of tone by Janet Yellen, head of the Fed, has been positive for the greenback.