Dollar strengthens back towards 2018 high

LONDON (Reuters): The dollar climbed back towards its highest level in 2018 on Monday as investors continued to bet that rising interest rates in the United States would boost the greenback.

The index measuring the dollar against a basket of currencies rose 0.2% to 92.749, not far from the 92.9 level – a 2018 high – it hit on Friday.

The dollar has rallied heavily over the past two weeks after investors rushed to unwind short positions and bet that higher rates in the US and signs its economy is performing better than other regions would feed through to a stronger currency.

The euro changed hands 0.3% lower at $1.1927, not far from Friday’s four-month low of $1.1910.

The British pound traded up 0.1% at $1.3543, near its four-month low of $1.3487 touched on Tuesday. Sterling has slumped in the past fortnight as investors reversed expectations of a rate hike at Thursday’s BoE meeting.

The dollar rose 0.1% versus the Japanese currency to 109.22 yen, off its three-month high of 110.05 yen.