Dollar close to two-year high on major currencies

The dollar hovered near a two-year high versus a basket of currencies in early Asian trading on Thursday, having seen the euro slide to a two-year low, after Federal Reserve meeting minutes showed that further monetary easing was not going to happen at present.

The report showed that the world’s largest economy would have to deteriorate further for the Fed to begin money printing. A few officials were of the belief that further stimulus was needed, but most remained unconvinced on the matter.

That saw the dollar index rise to 83.61, a two-year high, before steadying at 83.47. Meanwhile, the euro edged back up to $1.2245 after being driven to a two-year low of $1.2212.

The common currency has dropped by about 5.5 per cent to date this year, already surpassing losses chalked up last year, when it fell by over three per cent. In spite of its dramatic decline, most market players are reluctant to buy it while it’s down as the eurozone’s troubles show no signs of easing up.

Aside from concerns about the region’s decision-making process, the European Central Bank’s decision to cut the interest rate last week also undermined the single currency, increasing chances it could become a currency of choice for purchasing higher-yielding assets.