Dollar Aloft Near Multiyear Highs as Investors Parse Data, Fed

Relatively high interest rates in the U.S., bright economic outlook are bolstering the currency.

The dollar backed off from a two-year high this past week after a Federal Reserve meeting and several key data releases presented investors with conflicting signals on U.S. growth.

The ICE Dollar Index, which measures the dollar against a basket of six other currencies, stands just below its highest level since May 2017. The measure is up more than 5% over the last 12 months, boosted by comparatively high U.S. interest rates and expectations the U.S. will outperform other economies. Higher rates make the greenback more attractive to investors seeking yield.

Determining the dollar’s path is important for companies and investors, as the currency’s movements ripple throughout the world and affect everything from corporate profits to commodity prices.

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