Dollar jumps to 3-week high

The US dollar rose on Monday against a basket of major currencies, and hit a 3-week high while on track for the second straight daily gain, thanks to renewed demand for the greenback as the best available investment, due to growing chances of the near tightening of the US monetary policy following upbeat economic data and bullish statements by several Federal Reserve officials.

The dollar index rose 0.8% to the highest since August 27 at 92.88 points, after opening at 92.62 points, and hit an intraday low at 92.61 points.

The greenback gained 0.15% on Friday, after better-than-expected US producer prices data.

The dollar index gained 0.6% last week, the first weekly gain in 3 weeks, thanks to renewed demand.

Data showed on Friday that US producer prices index rose more than expected in August, as the index is considered a key gauge of the the US inflation rate, which reflects the continued inflationary pressures on the Federal Reserve.

This increased the chances of the Fed to start reducing the bonds purchases program sooner than expected.

Loretta Meester, President of the Federal Reserve Bank of Cleveland said on Friday that she still wanted the US central bank to start reducing asset purchases this year.

Philadelphia Federal Reserve President Patrick Harker said Monday that US bond investors seem to believe that the recent economic slowdown will not be enough to delay tapering the bond-buying program gradually.