Why did the dollar hit a two-month high?

[Mark Michaels]

[Mark Michaels]

[Sam Rondon]

The dollar recorded a two-month high today, as markets are waiting for a possible cut in US interest rates during this week.

The dollar index jumped around 0.1%, its highest mark since 31st May, partially due to the recent US gross domestic product report that beat analysts’ estimates, making some investors feel sceptical whether the Federal Reserve will continue easing this year after the Wednesday meeting.

US gross domestic product jumped by 2.1% in the second quarter, beating the estimated 1.8%, as an increase in consumer spending overshadowed some of the issues concerning declining exports and a smaller inventory build.

It is widely expected that the US Federal Reserve will cut interest rates for the first time in over ten years this week, a move which is widely seen as a precautionary one to keep the economy safe from global issues and trade pressures.