The euro jumped to a more than three-week high against the dollar as European Central Bank officials defended more aggressive monetary tightening.
Analysts said Tuesday’s US consumer price index would be closely watched for indications of how aggressively the Federal Reserve might need to raise interest rates next week to combat soaring inflation..
The Federal Open Market Committee, the monetary policy maker of the Federal Reserve, meeting on September 20-21, is expected to raise the key interest rate by 75 basis points from its current range of 2.25 percent to 2.50 percent..
The dollar index, which measures the value of the greenback against a basket of six rival currencies, drew strength recently from expectations of strong interest increases and reached a two-decade peak of 110.79 last Wednesday. Today, it fell 0.4 percent to 108.31, after hitting its lowest level since August 26.
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