The US dollar continued to rise higher as the market stepped into the European session following expectations of an interest rate hike by the Federal Reserve (Fed) and a strong US economy.
With expectations of a 30 basis point increase in March and 120 points overall by the end of the year, the US dollar has gained investor demand against other major currencies still awaiting the next tightening move from their central banks.
At the start of the European session, the US dollar showed a climb to its most recent high in nearly two years, with the dollar index trading higher at 97.35 against a basket of major currencies.
Meanwhile, the euro continued to depreciate to its lowest level since June 2020. The strengthening of the US dollar caused the euro to fail to take advantage of data readings that showed encouraging growth in the economies in France, Spain and Germany.
The pound sterling continued to trade gloomily at a four -week low, bringing it below the 1.3400 price level after posting a loss of more than 1% this week.
Investors are now looking forward to the Bank of England (BOE) policy meeting next week (February 3), where the market expects interest rates to be raised again as the central bank measures to curb the UK inflation surge.
Earlier, the publication of US consumer spending index (PCE) data, which was the main indicator of inflation to the Fed in tonight's New York session, will be the focus of the next investors ahead of the close of weekend trading.
