The dollar edged off two-month highs against the euro, Swiss franc and sterling in midday US trade yesterday, but dealers said steam was building for another push higher.
Earlier in the session, the dollar had soared against the European currencies and pared overnight declines against the Japanese yen as investors continued to favour the US as the investment destination of choice.
The dollar's rally had stalled after it failed to break through the psychologically key 91-cents-per-euro level, but dealers said it was just taking a breather.
The further decline in the value of the euro may not goad the European Central Bank into hiking interest rates unexpectedly when it meets today but, with inflation already nearly half a percentage point above its two per cent ceiling, analysts said the bank may have to move more aggressively than anticipated.
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