Expectations of an increase in the US interest rate have led to the dollar reaching a one month high against the euro.

This afternoon the dollar stood at 1.7553 against the pound and at 1.2014 to the euro.

Speculation about the dollar has been rife since Alan Greenspan, former chairman of the central bank, hinted at strong dollar growth and an interest rate increase at a financial dinner.

Demand for the dollar from Japanese investors has increased and with expectations of higher yields from bonds with an interest rate hike, they are continuing to buy the currency.

However, there are mixed messages coming from the major investment banks with Goldman, Sachs & Co recommending selling the dollar to limit losses and the Lehman Brothers recommending buying the dollar.

James McCormick, head of global currency operations for the Lehman Brothers in London told Bloomberg: "We expect the dollar's bullish momentum to remain intact."