Dollar at 2-week high as weakness seen overdone; euro dips

London

THE dollar edged higher to a two-week high against a basket of major currencies on Thursday as investors covered some short positions against the greenback on a growing view that the currency's recent weakness may have gone too far.

A selloff across global stock markets since late Friday and bets that the US could see at least three interest rate hikes in 2018 have driven the dollar up in recent days, with the currency gaining more than 2 per cent against its basket over the past week.

"We have seen some short-covering on the dollar after the selling in January and the greenback is looking to form a short-term base here," said Lee Hardman, a currency strategist at MUFG in London. The dollar was 0.1 per cent higher on the day at 9…