The dollar hit a four-month high against a basket of currencies on Wednesday, bolstered by strong U.S. data and growing expectations that the Federal Reserve may raise rates before the end of the year.
Commerce Department data showed U.S. housing starts surged 4.8 percent, underpinning a theme of strength in the economy. Fed funds futures rates point to investors seeing around a 40 percent chance the Fed will raise interest rates by its December meeting, according to CME Group's FedWatch tool, compared with less than 20 percent a few weeks ago. Expectations of a Fed hike come as other major central banks around the world gear up to ease monetary policy.
The dollar index, which tracks the currency against a basket of six major rivals, hit a peak of 97.323 in European trade, its highest level since March 10. It was last trading at 97.19, a tad higher on the day.