The dollar advanced to the highest in eight months versus the euro as borrowing costs and monetary policies between the two economies diverge.
Australia’s dollar rose to the most since November against the shared currency after the central bank chief said he was content with monetary policy. Brazil’s real gained against all 16 major peers as swap rates dropped to an 11-month low. Russia’s ruble posted the biggest gain in almost a month. The annual increase in U.S. consumer prices was unchanged as the Federal Reserve weighs the pace of tightening monetary policy while the European Central Bank has offered unprecedented stimulus.
“The ECB policy supports a weaker currency, so therefore I would expect euro will continue this pace of moving lower,” Lennon Sweeting, a San Francisco-based dealer at the broker and payment provider USForex Inc., said in a phone interview. “Toward year-end we should be settling in somewhere around $1.30, and a more aggressive forecast maybe even $1.28.”
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