Caution abounds as US$ hovers at 7-week high

London

THE US dollar steadied at its highest levels since March on Thursday after a perceived increase in chances of a rise in US interest rates by September drove its biggest daily gain against the euro in five weeks.

Stronger data, rhetoric from the Federal Reserve and a resulting shift on money markets has revived expectations among hedge funds of a new rally for the US currency, which came within sight of parity with the euro a year ago.