The U.S. dollar climbed to a more than two-month high on Wednesday, as European currencies weakened on the back of poor economic data and political worries.
U.S. traders were also digesting comments made by President Donald Trump, who once against criticized Federal Reserve Chairman Jerome Powell and the central bank’s gradual tightening of monetary policy in an interview with the Wall Street Journal. “Every time we do something great, he raises interest rates,” Trump said in the interview. He added that he might be regretting nominating Powell to serve as chairman.
The dollar, measured by the ICE U.S. Dollar Index DXY, +0.46% appeared unfazed by the central bank criticism, and shot 0.5% higher to 96.393, touching its highest level since mid-August, according to FactSet.
The Fed’s Beige Book is due to be released at 2 p.m. Eastern.
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The euro EURUSD, -0.7149% and the British pound GBPUSD, -0.8165% were the worst performers among developed-market currencies early Wednesday, as eurozone purchasing-manager index readings came in weaker-than-expected and U.K. Prime Minister Theresa May remained under fire from her party over her handling of Brexit negotiations.
The euro was down at $1.1393, down from $1.1471 late Tuesday, falling below the level of $1.14 for the first time since mid-August. Sterling bought $1.2895, versus $1.2982 late Tuesday, at its lowest since early September.
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In Sweden, the Riksbank kept interest rates on hold at -0.5%, in line with expectations, but signaled that it would get going on the tightening cycle soon albeit at a slow pace. Market expectations see a first rate increase in December or February.
The dollar was stronger versus the Swedish krona USDSEK, +0.9440% Wednesday, buying 9.0985 up from 9.0251 krona late Tuesday in New York.
In other central bank news, the Bank of Canada hiked interest rates by 25 basis points, in line with expectations, and said rates needed to keep rising “to a neutral stance to achieve the inflation target.” A neutral rate, or stance, is one that neither boosts nor impedes economic expansion.
The Canadian dollar USDCAD, -0.6572% rallied in response as investors anticipated further rate increases. One U.S. dollar last bought $1.2997, down from C$1.3087, after reaching a session low of C$1.2989 earlier.
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