On Wednesday, the dollar rose to a fresh 11-month high against a basket of major currencies, as investors continue to assess the prospects of higher interest rates next month and an increase in budget expenditures during the Trump administration.
The USD Index, which tracks the greenback against a trade-weighted basket of six major rivals, peaked at 100.34, the peak of December 2015, and is now trading at 100.25.
If the index will be able to break the high of December 2015, 100.51, it will reach its highest level since April 2003.
The dollar strengthened due to the expectations that the Fed is close to raising interest rates next month.
The US retail sales data, exceeding the forecast on Tuesday, became another argument in favor of a rate hike.
In accordance with the expectations of experts about the Fed rate, today the futures on the federal funds estimated the probability of an increase in US interest rates in December at 90.6%.
The expectations of rise in interest rates in the US have not changed amid optimism that faster economic growth would allow the Fed to increase borrowing costs.
Many investors also believe that the Trump presidency will lead to an increase in budget spending, tax cuts and a weakening of the financial regulation, which, in turn, will contribute to improving the economic growth and inflation.
The acceleration of economic growth and inflation may also force the Fed to tighten monetary policy faster than expected.
The dollar is found to fresh five-month high against the yen: USD/JPY pair grew by 0.34% to 109.56.
The euro fell to a fresh eight-month low: EUR/USD fell to 1.0704.
The pound rose: GBP/USD pair gained 1.2476, as investors are waiting for data on British jobs for October, which will be released later in the session.
The US Commerce Department reported that retail sales rose in October by 0.8% compared with the previous month, lower than the expected increase by 0.6%.
The base index of retail trade (excluding car sales) rose 0.8% in October compared with the expected 0.5%.
In addition, the Federal Reserve Bank of New York said that the manufacturing NY Empire State index rose to 1.50 in November from -6.80 in the preceding month. Analysts had expected a growth this month to -2.50.