Yesterday marked a strong performance for the dollar, after publication of Federal Reserve minutes of its May meeting.

Reaching a seven-week high against the euro, the dollar was trading at
$1.3432 late in New York, Reuters reports.

The dollar also gained ground against the pound and the yen.

Inflation concerns topped the agenda in the Federal Reserve minutes, suggesting that a sluggish housing market is not the main priority among policymakers.

An interest rate cut before the end of the year now seems less likely than earlier on in 2007, with some economists predicting the bank will hike rates in the near future.

Putnam Investments currency manager Paresh Upadhyaya told Reuters: "In the end, the Fed may not need to cut rates several times this year as was expected and that, combined with some good economic indicators, has been supporting the dollar."

Also speaking to the news agency, Singapore-based currency strategist Sharada Selvanathan predicted that the dollar would gain strength against main currencies "if risk aversion sets in".