Dollar rises on Fed speech

The US dollar rose sharply on Friday, and was heading for its best week since July after the Federal Reserve chair, Janet Yellen, said the US central bank is still on course to raise rates this year.

Speaking in Amherst, Massachusetts, she said most policymakers anticipate “an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter”.

Markets responded positively, with the dollar climbing to its strongest level in over a month, while gold and bonds slipped.

The Fed chair said the bank expects to see inflation return to two per cent over the next few years as temporary factors subside.

Last week, the Fed chose to leave rates on hold near zero, delaying the first increase in almost a decade at least until the next policy meeting in late October.

Elsewhere, the Norwegian krone slid to a 13-year low against the US dollar after the country’s central bank cut rates.

And finally Brazil’s real posted its biggest rally in seven years to stem a five-day losing streak that’s prompted the central bank to prop up the currency.