The dollar strengthened against its peers today trading steadily at 2 week highs as the greenback was supported by expectations that the Federal Reserve will increase rates this year.  Data released on Friday which revealed that US core inflation climbed at its fastest rate in 4 years in January continued to boost the dollar, fueling predictions for additional rate hikes by the Fed over the course of this year.  The US dollar index was up 0.77% trading at 97.36 off its 2 week high of 97.61 reached earlier in the day. 

The euro weakened against the dollar with the pair down 0.90% trading at 1.1030 off its session low of 1.1003 after having come off its session high of 1.1124 reached earlier in the day.  The euro was weighed down following the release of data from Markit which revealed that its flash euro zone composite output index decreased from a reading of 53.6 in January to 53.0 in February to its lowest level in 13 months.  Experts forecast the index which aggregates manufacturing and services sector activity to post a reading of 53.3 in January.  French private sector output revealed negative figures while business activity in Germany increased at a 7 month low.  The data forced the European Central Bank to consider ramping up its stimulus measures to boost growth. 

The pound weakened against the dollar with the pair plummeting 1.85% trading at 1.4139 off its session low of 1.4305 after having come off its session high of 1.4305 reached earlier in the day.  The pound was pressured to 6 year lows on the back of a surprise decision by London Mayor Boris Johnson to endorse an initiative to support Britain no longer being a member of the European Union.  On Friday British Prime Minister David Cameron negotiated a deal giving Britain special EU status which enabled a referendum to be called on Britain’s European Union membership. 

The yen weakened against the dollar with the pair up 0.36% trading at 113.07 off its session high of 113.38 after having come off its session low of 112.42 reached earlier in the day.  The yen was under pressure on the back of data which revealed that Japan’s initial manufacturing PMI for February dropped to a reading of 50.2 from a reading of 52.3 in January.  Experts forecast the index to tick down to 52.0.  The yen also dropped amid gains on Tokyo’s stock market and across the globe as risk appetite increased and the yen lost some of its safe haven appeal.   

The Australian, New Zealand and Canadian dollars strengthened against the greenback as commodity associated currencies were supported by oil prices recovering to trade over $33 per barrel as worry over the global supply surplus faded.  The Aussie rallied 1.12% against the dollar with the pair trading at 0.7231 off its session high of 0.7246 after having come off its session low of 0.7135 reached earlier in the day.  The kiwi dollar surged 1.15% against the greenback with the pair trading at 0.6709 off its session high of 0.6725 after having come off its session low of 0.6622 reached earlier in the day.  The loonie advanced 0.8% against the greenback with the pair trading at 1.3706 off its session low of 1.3662 after having come off its session high of 1.3792 reached earlier in the day. 

Disclaimer:  This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.