The dollar advanced to almost a five-year high as Federal Reserve Chair Janet Yellen stressed that the central bank remains on pace to increase interest rates next year for the first time since 2006.

The greenback extended gains after Yellen said that the shift in guidance means œthe committee considers it unlikely to begin the normalization process for at least the next couple of meetings. Officials held the rate at zero to 0.25 percent, where its been since 2008, while replacing a pledge to keep borrowing costs near zero for a œconsiderable time.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major currencies, added 1 percent to 1,121.34 as of 3:08 p.m. in New York. It closed on Dec. 5 at 1,122.34, the highest since March 2009.

The dollar gained 1.6 percent to 118.29 yen after depreciating to 115.57 yesterday, the weakest since Nov. 17. The U.S. currency strengthened 1.1 percent to $1.2366 per euro. The yen fell 0.5 percent to 146.37 per euro after adding 1.6 percent in the previous two days.

Source : Bloomberg