U.S. Dollar Climbs To Highest Levels In A Year

The value of the U.S. dollar has shown a significant move to the upside over the course of trading on Wednesday.

The U.S. dollar index has advanced by 0.64 points or 0.7 percent to 94.40 after reaching its highest intraday level in a year.

The greenback is trading at 111.98 yen compared to the 111.50 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1595 compared to yesterday's $1.1683.

The strength in the value of the U.S. dollar comes as traders continue to digest indications the Federal Reserve plans to begin scaling back its asset purchases in the near future.

The dollar saw further upside as after Federal Reserve Chair Jerome Powell warned inflation could be held up longer than previously thought due to supply chain problems.

"The current inflation spike is really a consequence of supply constraints meeting very strong demand, and that is all associated with the reopening of the economy, which is a process that will have a beginning, a middle and an end," Powell said during a virtual forum with other central bank leaders

"We see those things resolving," he added but noted, "It's very difficult to say how big those effects will be in the meantime or how long they will last."

On the U.S. economic front, the National Association of Realtors released a report showing pending home sales skyrocketed by much more than expected in the month of August.

NAR said its pending home sales soared by 8.1 percent to 119.5 in August after tumbling by 2.0 percent to a revised 110.5 in July.

Economists had expected pending home sales to jump by 1.4 percent compared to the 1.8 percent slump originally reported for the previous month.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The pending home sales index reached its highest level since January but was still down by 8.3 percent compared to the same month a year ago.

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