Rising worries over global economic growth and the potential resurgence of inflation combined to lift the U.S. dollar versus major rivals Tuesday, analysts said, with a closely followed gauge of the currency’s strength trading at a nearly six-month high.
“The outperformance of the U.S. dollar is coming against a backdrop of rising optimism about the prospects for the U.S. economy, which prompted Goldman Sachs to say that the prospect of a recession in the U.S. has dropped to a 15% probability in its opinion,” said Michael Hewson, chief market analyst at CMC Markets UK, in a note.The ICE U.S. Dollar Index DXY, a measure of the currency against major currencies, was up 0.5% at 104.80, after trading as high as 104.
Meanwhile, a eurozone survey showed that output in the bloc contracted at its fastest pace in nearly three years last month.