Dollar index continues to hover near 14-year peak in quiet trade

© Reuters. Dollar eases after rally, Trump, Fed hike bets still underpin demand

Investing.com – The dollar was lower but still close to a 14-year peak against the other majors currencies in quiet trade on Monday, as overall optimism over the U.S. economy since Donald Trump’s election and expectations for an upcoming rate hike continued to support the greenback.

gained 0.47% to 1.0636, off Friday’s 11-month trough of 1.0579.

The greenback has remained supported amid expectations that President-elect Donald Trump’s plans to ramp up fiscal spending and cut taxes will spur economic growth and inflation.

Faster growth would spark inflation, which in turn would prompt the Fed to tighten monetary policy a faster rate than had previously been expected.

The U.S. dollar has also been boosted by bets that the U.S. central bank will almost certainly raise interest rates next month.

Fed Chair Janet Yellen on Thursday reiterated that a rate hike “could well become appropriate relatively soon.”

Investors were looking ahead to a speech by European Central Bank President Mario Drgahi due later in the day, after he said on Friday that the central bank will continue to act as warranted using all instruments available.

Speaking at the 26th European Banking Congress, in Frankfurt, Draghi added that the euro zone’s economic recovery still relies to a considerable degree on accommodative monetary policy.

Elsewhere, climbed 0.94% to 1.2457.

eased 0.15% to 110.73, after rising to a six-month high of 111.19 overnight, while slipped 0.15% to 1.0086.

The Australian and New Zealand dollars pushed higher, with up 0.59% at 0.7376 and with climbing 0.66% to 0.7052.

Meanwhile, shed 0.38% to trade at 1.3453.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.40% at 101.00, just off Friday’s fresh 14-year peak of 101.54.

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Dollar index continues to hover near 14-year peak in quiet trade