Forex - Dollar slips, holding near 14-year highs

© Reuters. Dollar eases as rally pauses, holding near 14-year highs

Investing.com – The dollar dipped but was holding near almost 14-year highs against a basket of currencies on Tuesday after falls on Monday as traders took profits following the greenback’s longest rally in more than four years.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 100.91, holding below the 13-and-a-half year high of 101.54 set on Friday.

Before falling on Monday the greenback had risen for 10 straight sessions, its longest winning streak since May 2012.

The dollar has climbed since the outcome of the U.S. presidential election amid expectations that President-elect 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 Federal Reserve to tighten monetary policy a faster rate than had previously been expected.

The dollar rally has also been boosted by bets that a U.S. interest rate hike in December is now a near-certainty.

Fed Chair Janet Yellen late last week reiterated that a rate hike “could well become appropriate relatively soon”, citing progress in the economy.

According to Investing.com’s , odds for a rate hike at the Fed’s December 13-14 meeting are at 100%.

Expectations for higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.

The dollar dipped against the yen, with at 110.72, after touching overnight lows of 110.28. The pair set an almost six-month high of 111.35 on Monday, before pulling back.

The euro was fractionally higher, with edging up to 1.0638, having recovered from Friday’s 11-month lows of 1.0568.

The pound moved lower, with down 0.32% at 1.2448.

Sterling ended Monday’s session with gains of 1.3% as investors continued to assess what form will take.

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Forex - Dollar slips, holding near 14-year highs