Bloomberg: Dollar Rises Against Euro on Optimism Fed’s Rate Will Stay Above ECB Rate

Nov. 23 (Bloomberg) — The dollar rose against the euro on
optimism interest rates in the U.S. will remain higher than in
Europe even as the Federal Reserve signals it may be nearing the
end of its rate increases.

The U.S. currency also pared a decline against the yen.

Earlier today, the dollar reached a two-week low versus the euro
after minutes from this month’s Fed policy meeting showed some
officials worried about the risk of lifting rates too high.

“The dollar has been king over the past year,” said Kamal
Sharma, a currency strategist at Bank of America Corp. in London.
“The reaction in the market is slightly overdone.”

Against the euro, the dollar strengthened to $1.1795 at 9:39
a.m. in London from $1.1814 late yesterday in New York, according
to electronic foreign-exchange dealing system EBS. The dollar was
at 118.65 yen from 118.74 late yesterday.

The dollar has advanced 14.5 percent against the euro and
15.4 percent versus the yen this year as the Fed has raised its
rate seven times since Dec. 31 to 4 percent. By contrast, the
Bank of Japan has kept rates near zero since 2000, and the ECB
has indicated it may lift its benchmark rate next month from 2
percent, the first increase in five years.

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