The greenback made a comeback after almost a six week low against the Euro on Tuesday. A report on inflation going up for November in the US and the forthcoming interest rate hike announcement did not deter the USD rate to go up.
The Euro went down to $1.10600 after a 6 week high earlier in the day but dipped lower to $1.09340 after the US core Consumer Index was announced. The index increased by 2% for the past 12 months ending in November. May 2014 was the last time the index hit a high mark.
The released data gave market traders more assurance of the rate hike which is the first in almost a decade. This increased rate is likely to drive more investments into the US and therefore boosting the greenback.
The almost 6 weeks high of the Euro is attributed to the continued repurchases of the single currency or what is called “short-covering” in the background of the ECB minimum move on the stimulus this December and the US Fed indicating that further interest rate hikes will be slow after the initial announcement.
The USD index is up at 0.5% at 98.095 after the 6 week low of 97.190. The dollar index is a measurement of the currency against other 6 major currencies.