Dollar at 2-Week Highs after U.S. Budget Deal

The U.S. dollar was at two-week highs against a currency basket on Thursday after rising in the previous session after U.S. Senate leaders announced a two-year budget agreement.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.12% to 90.27 by 03:24 AM ET (08:24 AM GMT) after rising 0.71% on Wednesday.

The dollar rose after U.S. congressional leaders on Wednesday reached a two-year budget deal to raise government spending by almost $300 billion. The budget agreement averted the risk of a government shutdown or a debt default.

The gains in the dollar were a continuation of the increases that came amid the sharp drop in stock prices on Friday and on Monday, which saw the Dow Jones Industrial Average record its biggest single-day point decline on record.

The downturn in the equity market was triggered after strong U.S. wage growth data prompted expectations that the Federal Reserve may interest rates at a faster pace that had previously been expected.

The euro edged lower against the dollar, with EUR/USD dipping to 1.2248, which was the weakest level since January 23.

The dollar pushed higher against the yen, with USD/JPY rising 0.26% to 109.67.

The pound was a touch lower against the dollar and the euro ahead of the Bank of England’s policy meeting later in the day when it was widely expected to keep rates on hold. GBP/USD was last at 1.3862 while EUR/GBP was trading at 0.8827.

Meanwhile, the New Zealand dollar fell to one-month lows overnight after the Reserve Bank of New Zealand kept interest rates on hold at record lows.

NZD/USD was last at 0.7201 after falling as low as 0.7177 earlier.

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