With markets back to focusing on global interest rates, the US dollar fared buoyantly, rising to its strongest in seven weeks against the euro and to fresh six-year peaks against peers from Canada, Australia and New Zealand. Fears over Greek debt and slowing growth in China are in remission, at least for now, returning attention to global fundamentals. Few currencies can compete with the dollar on a fundamental basis, with the US economy on the mend after its winter downturn. America’s improving prospects have the Federal Reserve on track to raise interest rates this year. Meanwhile, interest rates appear to have further room to fall. Canada’s Dollar sank to March 2009 lows after its central bank slashed interest rates, its second reduction this year, to shore up its oil-battered economy.

Euro

Markets took positive news on the Greek crisis as a fresh sell signal for the euro. Greece cleared its first hurdle to securing its third bailout in five years after the country’s parliament passed the austerity bill. The news helped keep in check worries about the Greek crisis which kept the spotlight on fundamental drivers, a source of negativity for the euro. As expected, the European Central Bank stood pat on policy. President Mario Draghi reiterated the bank intended to keep Quantitative Easing stimulus in force until at least September 2016. On Greece, Mr Draghi signaled the ECB would increase its emergency credit to Greek banks.

Sterling

Few currencies can compete against the dollar on a fundamental basis, but sterling is one of them. Sterling hit two week highs against the dollar this week and notched new seven year peaks against the euro after the Bank of England dropped hints that UK interest rates might rise a bit sooner next year with the economy on a steady path to recovery.

US Dollar

It’s the same story, but it’s a compelling one: The Fed is poised to raise rates for the first time in nearly a decade. That bullish narrative is behind the dollar’s revival. Adding to the case for the Fed to hike interest rates, weekly jobless claims improved more than expected, falling by 15,000 to 281,000. That marked 19 weeks in a row under 300,000, a level under which is consistent with solid monthly job growth

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