NEW YORK (MarketWatch) — A closely watched U.S. dollar index was on track for a monthly gain after spending much of February in consolidation mode as investors await further signals on the timing of the Federal Reserve’s next rate-hike move.
The ICE dollar index DXY, +0.05% , which tracks the U.S. currency against a basket of six major rivals, traded at 95.194, up from a level of 95.150 in North American trade late Thursday and near a level last seen in 2003. The move helped fuel’s a downdraft in dollar-denominated crude-oil futures Thursday.
For the month, the index is up 0.4%. The dollar was on a tear over much of 2014 into January, surging on expectations the Fed will move this year to tighten interest rates as other major central banks, notably the European Central Bank and Bank of Japan, pursue ultraloose monetary policy measures. With February’s gain, the index is up 5.6% since Dec. 31.
The dollar found a modicum of support on a smaller-than-expected downward revision to fourth-quarter U.S. gross domestic product data. The Commerce Department pegged growth at an annualized 2.2%, down from an initial estimate of 2.6% but above forecasts for a revision to 2%.
The dollar jumped Thursday after a core U.S. consumer inflation reading came in higher than expected, while a fall in the headline inflation reading boosted real wage growth, bolstering the Fed’s perception that the labor market is improving, said Marshall Gittler, strategist at IronFX in London.
That said, Federal Reserve Chairwoman Janet Yellen this week warned that wage growth remains sluggish and that inflation remains below the Fed’s long-term objective, noted Jane Foley, currency strategist at Rabobank.
The euro EURUSD, -0.04% traded at $ 1.1193, little changed from its level of $ 1.1199 in late North American trade.
The dollar was at ¥119.39 compared with USDJPY, +0.27% ¥119.49 late Thursday in New York.
Meanwhile, the Turkish lira came under renewed pressure, slipping to an all-time low versus the dollar on indications its government will move to change the central bank’s mandate.
Those measures could be “potentially devastating” to Turkey’s growth and investment prospects, “and will likely expose the country to severe investor confidence shocks,” said Phoenix Kalen, analyst at Société Générale, in a note. The government also intends to appoint new external members to the bank, she said.
The lira USDTRY, +0.27% traded at a rate of 2.5145 per dollar in recent action and traded at 2.5248 per dollar in earlier action, breaching the previous all-time low set on Feb. 11, according to The Wall Street Journal.
The WSJ Dollar Index BUXX, +0.08% a measure of the dollar against a basket of major currencies, was down 0.03 point at 85.89.