The dollar continued its assault on the euro Friday, surging to its highest since November 2012 amid expectations that monetary policy in the U.S. and Europe will diverge.
Today’s economic data from the U.S. raised expectations the Federal Reserve will raise interest rates ahead of schedule next Spring.
A report from the U.S. Commerce Department said the U.S. economy grew at an annual pace of 4.6 percent in the second quarter, compared to the previously reported 4.2 percent growth.
Meanwhile the European Central Bank will likely announce further stimulus to stoke inflation and jump-start the sluggish euro zone economy.
A survey by market research group GfK showed that German consumer sentiment is set to deteriorate in October on continued geopolitical tensions.
The dollar rose to $1.2680 versus the euro, having gained about 10 cents since April.
Gradual gains over the course of the last three sessions took the dollar to $1.6250 versus the sterling. The buck has edged back toward 10-month highs near $1.61 despite hawkish remarks from Bank of England Gov. Mark Carney, who hinted that an interest rate hike is imminent.
The dollar is on the verge of a new 6-year peak against the yen. The pair was holding at Y109.40, a whisker from the dollar’s highest levels since 2008.