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Dollar solid as Fed conservatives stand out among central banks

The US dollar traded near a more than one-year high against the euro and close to a five-year high against the yen as Federal Reserve policymakers tilted conservatively, supported by solid US economic data, in contrast to more dovish currency prospects in Europe and Japan, according to Reuters.

The US Dollar Index, which measures the greenback against six major currencies, fell 0.1% to 96.733, but remained near Wednesday's high of 96.938, its strongest since July 2020.

The index is up 2.77% this month as traders bet that warming inflation will force the Fed to raise rates sooner than Fed officials have signaled. The market is anticipating a first rally in June, with strong odds that it could be as soon as May.

Minutes of the central bank's Nov. 2-3 policy meeting showed on Wednesday that many policymakers said they would be willing to speed up their bond-buying cuts if inflation was high. is maintained and will proceed to increase interest rates faster.

In addition, indicators of the labor market and consumer spending far exceeded economists' estimates, while inflation continued to rise.

San Francisco Fed President Mary Daly said in an interview with Yahoo Finance published the same day that she could see the possibility that the Fed would accelerate easing of its bond purchases.

The dollar was little changed at 115.355 yen, holding near an overnight high of 115.525, levels not seen since January 2017.

The euro rose 0.13% to $1.1215, but remained near a 17-month low near $1.1186 on Wednesday after German economic confidence slumped for a fifth straight month .

Minutes of meetings since the October 28 meeting of the European Central Bank will be published.

Lagarde will speak at an ECB regulatory conference later on Thursday, at which board members Frank Elderson and Edouard Fernandez-Bollo will also participate.

The British pound rose 0.14% to $1.33465 after falling to $1.3317 on Wednesday for the first time in 11 months.

Investors remain focused on whether the Bank of England will raise interest rates on December 16.

Elsewhere, the Australian dollar ro rose 0.06% to $0.7201, not far from Wednesday's $0.7185, its lowest since September.

The New Zealand dollar was little changed at $0.6870, still close to a three-month low of $0.6856 hit the previous day, as the country's Reserve Bank raised its benchmark interest rate. copies add a quarter of a percent to 0.75%.

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