Resilient U.S. growth is fueling another rebound in the dollar and sending bearish investors scrambling, though the rally will be tested by a gauntlet of data and the Federal Reserve’s meeting later this month.
The U.S. dollar index , which measures the currency against a basket of its peers, has surged 5% since late July and stands at its highest level in around half a year. The greenback’s gains have pressured the currencies of the world’s biggest economies, sending China’s yuan to its lowest since December 2007 and spurring expectations for the Japanese government to intervene and prop up the battered yen.
Many market participants had expected the U.S. economy to soften this year under the weight of the Fed’s rate increases, pushing the dollar lower.
Read the full story on Reuters here.