The US dollar rose against major currencies for a second straight session on Thursday in the wake of the Federal Reserve's signals that it could hike rates soon and looser monetary policy overseas. The greenback hit a 28-month high against the Swiss franc at 0.9847 franc after the Swiss National Bank said it would impose an interest rate of -0.25 percent on some large deposits held by investors in francs, as it seeks to discourage buying of the currency as a safe haven.
The euro hit its lowest level against the dollar since December 8, at $1.2266, while the dollar also hit a one-week high against the Japanese yen of 119.30 yen a day after the Fed altered a pledge to keep rates near zero for a "considerable time" in a show of confidence in the US economy. The contrast between approaching tighter monetary policy in the US and looser policies in Europe, Japan, and Switzerland "could not be starker" and continued to push the dollar higher, said Shaun Osborne, chief currency strategist at TD Securities in Toronto.
Rate increases are expected to boost the greenback by driving investment flows into the United States. The Fed's upbeat assessment of the US economy also helped the dollar extend gains against the safe-haven yen. The dollar rose against the rouble, meanwhile, after sliding more than 12 percent against the Russian currency in US trading Wednesday. Analysts said a dip in oil prices and few concrete measures for pulling the country out of a crisis from Russian President Vladimir Putin hurt the rouble. The dollar was last up 2.68 percent at 61.75 roubles.
"Lower oil prices are destroying Russia's economy," said Joseph Trevisani, chief market strategist at WorldWideMarkets in Woodcliff Lake, New Jersey. Sales of oil and gas are Russia's chief source of export revenue. The euro was last down 0.5 percent against the dollar at $1.2281, while the dollar was last up 0.77 percent against the Swiss franc at 0.9803 franc. The dollar was up 0.13 percent against the yen at 118.77 yen. The US dollar index, which measures the greenback against a basket of six major currencies, was last up 0.1 percent at 89.222. Most US government bond yields touched one-week highs, while the benchmark S&P 500 stock index was last up 1.88 percent.