USD Snaps 2-Day Losing Streak Vs. Euro

The U.S. Dollar ralliedagainst the Euro this morning as traders increased their wagers that the Federal Reserve will raise interest rates by the end of the year. The minutes of the most recent Fed meeting revealed that policy makers felt that even cutting interest rates to 2 percent was a close call. This reinforces speculation that the Fed has finished cutting interest rates for now.

The New Zealand Dollar gobbled up recent losses this morning, bolstered by a package of tax cuts that made traders feel it is now less likely that the Reserve Bank will cut interest rates. The news boosted the Kiwi to two-week highs against the U.S. Dollar.

The Australian Dollar hit its highest level since it started trading freely in 1983 as investors chased yields. The Aussie Dollar has rallied ten percent this year, making it the second biggest gainer among all the major currencies.

The British Pound rallied against the U.S. Dollar, surging to three week highs against the U.S. Dollar. The Pound benefited from news that the Retail Sales in the U.K. fell less than expected in April, which diminished fears about the health of the British economy.