LONDON: The dollar rose on Monday, building on two consecutive weeks of gains, as investors bet that trade war rhetoric and a strong U.S. economy would continue to drive the currency higher.
Against a broad basket of currencies, the dollar rose a third of a percent to 95.451 and is within striking distance of more-than-one-year peak of 95.652 reached on July 19.
"The U.S. economy is doing well and the Fed is moving towards a more predictable path of interest rates than earlier which has prompted us to change our underweight positions on U.S. debt to neutral in some portfolios," said Paul Eitelman, a senior investment specialist at Russell Investments.
The dollar´s gains has been more pronounced against emerging-market currencies as investors bet that an escalation in trade war concerns would hit these export-oriented economies harder.
Since mid-April, the dollar index has gained 6 percent while an emerging-market local currency bond exchange traded fund has fallen more than 10 percent over the same period.
The dollar gained against emerging-market currencies, including the Turkish lira, which weakened 0.6 percent to a record low of 5.12 to the dollar.