In Forex trading online, the U.S. dollar advanced to a two-week high against major currencies on Thursday 20th of June of 2013 and looked likely to extend gains after the Federal Reserve signaled it would begin withdrawing its stimulus programs this year as the U.S. economy improves, according to Reuters report.
Stronger-than-expected data on factory activity in the U.S. mid-Atlantic region and on home resales added to the dollar's momentum, overshadowing another report showing a rise in weekly jobless claims, report said.
According to the report, investors re-established optimistic bets on the dollar after Fed Chairman Ben Bernanke, following the central bank's two-day policy meeting that concluded on Wednesday 19th of June , said the Fed was likely to end its bond-buying program, known as quantitative easing (Monetary policy used by central banks to stimulate the economy), by mid-2014, which with higher interest rates is expected to help the dollar in Forex trading online .
Benchmark U.S. Treasury yields rose to their highest in almost two years after Bernanke's remarks. Traders of short-term U.S. interest rate futures expect the Fed to begin lifting its target for short-term borrowing costs in late 2014, report said.
In contrast to the Fed's stance, the Bank of Japan recently unveiled aggressive easing measures to fight deflation and pledged to do more if needed. Pressure is also growing on the European Central Bank to take steps to stem deterioration in the euro zone's economy.
In Forex trading online the dollar index, which measures dollar performance against a basket of currencies, hit a two-week peak of 82.145, the strongest since June 6. It was last up 0.5 percent.
Analysts said the dollar could face volatile moves in the coming weeks as investors use every piece of economic data to try to gauge the health of the economy. The Fed painted an upbeat view of the economy on Wednesday, saying downside risks to growth have receded.
"Volatility is going to be the name of the game. We're going to see some big ugly moves," said Ronald Simpson, managing director of global currency analysis at Action Economics im Tampa, Florida. The volatility can be taken as an advantage in Forex trading online to make some profit in short positions.