(MENAFN- Khaleej Times) The dollar rallied to its strongest level in almost three years as data signalled the world's biggest economy is improving, increasing speculation the Federal Reserve will begin slowing its unprecedented monetary stimulus.
The US currency climbed versus all of its 16 most-traded peers this week as US employers added more jobs in June than forecast, unemployment-benefits claims fell and a gauge of manufacturing beat projections. The euro and pound dropped against the dollar after the European Central Bank and the Bank of England said they'll keep rates at record lows. The Fed is scheduled to release the minutes next week of its last meeting.
"The string of positive economic reports certainly helps to lay the foundation for the Federal Reserve to start considering the near-term tapering of their quantitative-easing programme," Ravi Bharadwaj, a senior market analyst in Washington at Western Union Business Solutions, said.
The Dollar Index, which IntercontinentalExchange uses to track the greenback versus currencies of six major US trade partners including the euro and yen, increased 1.6 per cent to 84.449 last week in New York. The gauge touched 84.530 on Friday, the strongest level since July 13, 2010, as it extended a third weekly gain, the longest stretch since March 8.
The greenback climbed 1.4 per cent to $1.2829 per euro and reached $1.2806, its strongest level since May 17. The US currency also advanced for a third week against the yen, strengthening 2.1 per cent to ¥101.20. The euro appreciated 0.7 per cent to ¥129.82.
South Korea's won was the best performer last week among the dollar's 16 most-traded counterparts tracked by Bloomberg, declining less than 0.1 per cent versus the US currency. Norway's krone and the South African rand were the biggest losers, tumbling 2.9 per cent and 3.2 per cent.
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