Dollar index maintains highs

Published: 24 Sep at 6 AM Tags: Euro, Dollar,

The dollar index, a measure of how the US currency is doing against a basket of other major currencies, has managed to hold close to its highest level in four years. However, the greenback has dipped a tad against the safe haven yen after US and Arab fighters attacked targets in Syria.

The Japanese unit was also given a boost by reports that Prime Minister Shinzo Abe wants to protect local economies from a weakening yen. US president Barack Obama said earlier this week that further strikes against Syrian extremists are likely to take place.

The dollar is 0.3 per cent down against its Japanese rival at 108.56 yen after hitting a low of 108.46 yen earlier. The dollar index has risen slightly to 84.671. This is not far off Monday’s 84.861, the highest the index has been since July 2010.

The dollar index has been on the ascendant for the past 10 weeks as investors expect the US Federal Reserve to hike interest rates sooner than had originally been expected. This is the opposite of what is going on in Japan and Europe.

The euro has been given a much needed lift by positive economic data coming out of Germany and is currently trading up 0.1 per cent at $1.2852.