Investing.com - The dollar remained near six year highs against the yen on Monday and four year peaks against a basket of major currencies, after the release of positive U.S. personal spending data as expectations for an early hike in U.S. interest rates continued to support demand for the greenback.
USD/JPY hit highs of 109.75, the most since August 2008 and was last up 0.14% to 109.43.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, touched a four year high of 85.93, and was holding steady at 85.73, after notching up its eleventh consecutive weekly gain last week.
In a report, the Commerce Department said that U.S. personal spending rose 0.5% in August, beating expectations for an increase of 0.4%, after a 0.1% dip in July.
Meanwhile, personal income, reflecting income from wages, investment, and government aid, rose 0.3%, up from 0.2% in July, broadly in line with forecasts.
Demand for the dollar continued to be underpinned after data on Friday showed that the U.S. economy grew at an annual rate of 4.6% in the second quarter, the fastest pace in two-and-a-half years.
The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner.
In contrast, the Bank of Japan and the European Central Bank look likely to stick to a loose monetary policy stance amid concerns over faltering economic growth.
EUR/USD touched lows of 1.2664, the weakest since November 2013 and was last trading at 1.2694.
The euro zone was to release preliminary data on consumer prices on Tuesday ahead of the outcome of Thursday’s ECB meeting.
Investors were also looking ahead to economic data from the U.S., with Friday’s nonfarm payrolls report sharply in focus after August’s report fell short of expectations.
Elsewhere, the pound was at two week lows, with GBP/USD slipping 0.10% to 1.6227, while the Swiss franc remained near 14 month lows, with USD/CHF at 0.9506.
The New Zealand dollar also fell to 14 month lows of 0.7709, before retracing some of those losses to trade at 0.7766, down 1.25% for the day. Weakness in the kiwi pushed the Australian dollar lower, with AUD/USD down 0.39% to 0.8727.
Meanwhile, USD/CAD was steady at 1.1153, after rising to six month highs of 1.1178 earlier in the day.