Dollar Gains on Prospects Fed Will Succeed in Sparking Inflation
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The dollar rose for the first time in three days against the euro on speculation the Federal Reserve will succeed in fueling inflation with more government bond purchases, supporting the U.S. economic recovery.
The greenback gained versus 14 of its 16 major counterparts after the Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction. A negative yield suggests investors are betting the Fed will be successful in preventing deflation. The pound was near its weakest in more than six months against the euro before a report likely to show U.K. economic growth slowed to a third of the pace in the previous three months.