WASHINGTON (dpa-AFX) - The U.S. dollar climbed to a fresh two-year high on Tuesday amid rising expectations the Fed would announce a series of steep rate hikes this year.
St. Louis Federal Reserve Bank President James Bullard's comments that more aggressive policy tightening is needed to combat inflation buoyed up the dollar.
The central bank is prepared to get to neutral expeditiously, Bullard said on Monday, reiterating that he supports interest rate at 3.5% by the year end.
The path outlined by Bullard would require 50 basis point rate hikes at each of the remaining meetings for this year. He said that a 75 basis point rate hike could be an option, if necessary.
Data released by the Commerce Department showed housing starts rose by 0.3% to an annual rate of 1.793 million in March after spiking by 6.5% to a revised rate of 1.788 million in February.
The uptick surprised economists, who had expected housing starts to fall by 1.4% to a rate of 1.745 million from the 1.769 million originally reported for the previous month.
The Commerce Department said building permits also climbed by 0.4% to an annual rate of 1.873 million in March after slumping by 1.6% to a revised rate of 1.865 million in February. Economists had expected building permits to tumble by 1.8% to a rate of 1.825 million from the 1.859 million originally reported for the previous month.
The International Monetary Fund (IMF) said on Tuesday as it slashed the growth forecasts and lifted the inflation outlook. The IMF said the war in Ukraine and its global spillovers have dealt a severe blow to the global economic recovery and could result in long-term damage.
In its latest World Economic Outlook report, the lender lowered the global growth forecast for this year to 3.6% from 4.4% predicted in January. The projection for next year was cut to 3.6% from 3.8%.
The U.S. growth forecast for this year was trimmed to 3.7% from 4.7%. The outlook for next year was lowered to 2.3% from 2.6%.
The dollar index, which rose to 101.03, was at 100.97 a little while ago, up 0.19% from the previous close.
Against the Euro, the dollar is down slightly at $1.0790.
The dollar is trading at $1.2999 against Pound Sterling, firming from $1.3011.
Against the Japanese currency, the dollar strengthened to a fresh 20-year high, fetching 128.89 yen a unit, about 1.5% more than the previous close of 126.99 yen.
The dollar is at $0.7377 against the Aussie, firming from $0.7348.
The Swiss franc is down against the dollar at CHF 0.9521, about 0.8% lower than Monday's close of CHF 0.9447.
The Loonie is down slightly at C$ 1.2619 against the dollar.
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