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Dollar Index Higher, But Gains Tempered by Sterling

May 24, 2016 at 14:25 by Miranda Marquit

The US dollar index is higher today, but the gains are tempered by a UK pound that is gaining ground. Rate hike expectations and better economic data continue to help the greenback in currency trading, even though the US currency is lower against the sterling today.

The US dollar index, a representation of the dollar’s performance against a weighted basket of currencies, is heading higher today. The dollar’s gains against the euro, the Japanese yen, and the Canadian dollar are a big part of the success today. However, the gains by the dollar index are being tempered by the success of the UK pound.

Sterling is mostly higher today, gaining as concerns about an exit from the European Union are fading. The faction that wishes to remain a part of the EU is gaining the upper hand, making a Brexit less likely, and that is helping the UK pound.

There is still plenty for the dollar to be optimistic about, however. Speculation that more rate hikes are on the way from the Fed is helping. Economic data has been relatively strong, and that provides help as well.

At 14:21 GMT the US dollar index is up to 95.539 from the open at 95.301. EUR/USD is down to 1.1149 from the open at 1.1259. GBP/USD is up to 1.4601 from the open at 1.4484.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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