Dollar rose to a week high against the euro as investors strongly believe the Federal Reserve will increase lending rate by the end of 2009 as U.S. economy recovers.

Euro was also down versus the yen after Standard & Poor´s downgraded Ireland´s sovereign credit rating for a second time. The pound was on its fourth day low versus the dollar on forex trades.

Currency strategist Brian Kim commented that “The market is speculating that the Fed is more prepared to hike rates. The S&P’s downgrade of Ireland is also weighing on the euro.”

U.S. greenback advanced to $1.3855 per euro in early New York trades. Kim sated that the dollar will weaken down to $1.40 in a month and back to $1.35 in three months.

The dollar index used by ICE to track the greenback against the euro, yen, pound and Swiss franc, Canadian dollar and Swedish krona rose 1 percent in forex accounts, its highest level since May 20th.

The Job Situation

Even thou some sectors of the economy has been recovering, the race for unemployment is still attacking the majority of the globe.

Jobless rate rose to 9.2 percent in the 16 nations of the Euro zone, the highest rate in the last 10 years. Unemployment hit a 25-year high of 8.9 percent.