By Saikat Chatterjee
LONDON (Reuters) – The dollar rose to its highest levels in more than a year on Wednesday as dovish comments by the Bank of Japan and weak data from China reinforced the greenback’s attractiveness as an investment destination.
Fueled by an overnight rally in equities – Japanese stocks are up more than 2 percent – the dollar was set for a seventh consecutive month of gains.
“Eurozone growth figures have been disappointing and the Bank of Japan is striking a dovish stance at a policy meeting today so there is more room for the dollar to gain from current levels,” said Paul Bednarczyk, director of G10 FX at Continuum Economics based in London.
Against a basket of its rivals, the dollar rose to 97.07 in Asian trade, its highest since June 2017 and up ten percent from its February lows. It is holding firm against the euro at $1.1356.
It has risen for seven consecutive months as the twin powerful forces of risk aversion in emerging markets and the growing divergence of the strength of the U.S. economy relative to its global peers, especially Europe, has forced investors to buy the dollar.
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