By fxtimes.com

Highlights:

• US dollar index reaches highest level since April 2003.
• Dollar gains against all six of its trade-weighted peers.
• US stocks under pressure amid growing expectations for a Federal Reserve rate hike.

The US dollar index this week climbed above the 100.00 mark for the first time since April 2003, signifying a new era for the greenback, which has rose a staggering 26 percent since the beginning of July.

The dollar index, a weighted average of the US dollar against a basket of currencies that includes the euro, yen, pound, Swiss franc, Canadian dollar and Swedish krona, advanced 0.77 percent to 100.2. The index first touched the critical 100.00 level on Wednesday.

The US dollar completed a sweep against its trade-weighted peers, posting staggering gains against the Canadian dollar, euro, pound and krona.

The USDCAD climbed to fresh six-year highs on Friday, advancing around 90 pips to 1.2785. The pair reached a daily high of 1.2825.

The euro continued to slide, as the markets set the floor below 1.04, with parity signifying the next psychological level. The EURUSD plunged to a daily low of 1.0463, a fresh 12-year low. It would subsequently consolidate at 1.0495, declining 130 pips.

The British pound fell to fresh 20-month lows against the dollar, as the GBPUSD bottomed out at 1.4699. It would subsequently consolidate at 1.4738, declining 150 pips.

The dollar rose briskly against the krona, as the USDSEK climbed 1.5 percent to 8.72. The pair was nearing session highs at the end of North American trade.

The dollar drifted higher against the Japanese yen, but remained firmly capped below the 122.00 level. The USDJPY climbed 0.1 percent to 121.43.

The dollar traded above parity against the Swiss franc, as the USDCHF climbed 0.14 percent to 1.0049.

The dollar binge came at the expense of US stocks, as all of the major indices reported declines, led by a triple-digit plunge for the Dow Jones Industrial Average. The DJI declined 145.91 points to 17,749.31. The S&P 500 index fell 12.55 points to 2,053.40, while the tech-heavy NASDAQ retreated by 21.53 points to 4,871.76.

Investors are betting that the Federal Reserve will begin raising interest rates by midyear to manage expectations. Fed Chair Janet Yellen had previously pledged patience in raising interest rates, but that could change next week. The Federal Open Market Committee will not adjust monetary policy next Wednesday, but could drop the word “patient” from its official rate statement.

By fxtimes.com