Early trade in New York: Dollar rallies across the board

NEW YORK: The US dollar rallied across the board on Thursday, as higher Treasury yields helped it recoup nearly all its losses from the previous session following the Federal Reserve’s pushback against speculation over interest rate hikes.

The US Dollar Currency Index was 0.48% higher at 91.809, after falling 0.56% to a two-week low of 91.30 earlier in the session.

The US economy is heading for its strongest growth in nearly 40 years, even as central bank policymakers are pledging to keep their foot on the gas despite an expected surge of inflation, the Federal Reserve said on Wednesday.

While inflation is expected to jump to 2.4% this year, above the central bank’s 2% target, Federal Reserve Chair Jerome Powell said that is viewed as a temporary surge that will not change the Fed’s pledge to keep its benchmark overnight interest rate near zero.

Following the Fed’s statement, the benchmark 10-year yield retreated from a 13-month high of 1.69% hit early on Wednesday. On Thursday, yield on the 10 year bond resumed its recent rally to hit a fresh 13-month high of 1.7383%.

Against the yen, the dollar gained 0.27% to 109.135 yen.

Elsewhere, Norway’s crown reached its strongest against the euro in 13 months - 10.0223 crowns per euro - before erasing gains after Norway’s central bank left its key interest rate unchanged at a record-low 0.0% on Thursday and shifted its forward guidance to signal that a rate increase may follow in the second half of this year.

Sterling fell against the dollar as the Bank of England warned the outlook for Britain’s recovery remained unclear, dampening some speculation the bank would signal a more confident outlook.

Bitcoin slipped 2.09% to $57,668.42.