US dollar at 3-week high; euro, yen weaken

London

THE US dollar rallied to a three-week high against the euro and a basket of currencies on Wednesday on renewed expectations that the Federal Reserve could raise interest rates soon.

US consumer prices recorded their biggest increase in more than three years in April as petrol prices and rents rose, while other data showed housing starts and industrial production rebounded strongly, adding to the case for an early rate hike.

Rate futures, based on the CME's Fedwatch, moved to price in a 70 per cent chance of a rate hike by December, with a 50 per cent chance of a move priced in by September. The chance of a hike in June was at around …