Investing.com – The U.S. dollar eased but remained near one-and-a-half month highs against a currency basket on Thursday, tracking a spike in Treasury yields on robust U.S. data and indications from the Federal Reserve that interest rates will continue to rise.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 95.57 by 03:43 AM ET (07:43 AM GMT) after hitting an overnight high of 95.78, the most since August 20.
Data on Wednesday showed that U.S. service sector activity accelerated to a 21-year high in September and another report showed that private sector hiring increased at the fastest pace in seven months in September.
Adding to the upbeat mood, Fed Chairman Jerome Powell said Wednesday that the U.S. central bank may raise interest rates above an estimated “neutral” setting as the U.S. economy continues to grow.
“Interest rates are still accommodative, but we’re gradually moving to a place where they’ll be neutral,” neither holding back nor spurring economic growth, Powell said. “We may go past neutral. But we’re a long way from neutral at this point, probably,” he added.