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By Bloomberg

The dollar rose to a three-month high against its major peers after Federal Reserve Chair Janet Yellen reiterated the U.S. is on track to raise interest rates this year.

The U.S. currency advanced to the strongest in six weeks versus the euro after the Greek parliament voted to accept further austerity required for a new bailout, clearing one obstacle to higher U.S. borrowing costs. The New Zealand dollar plunged to a six-year low after whole milk powder prices slumped at an auction. The Aussie dropped for a second day with its Canadian peer after the Bank of Canada cut rates.

“The big U.S. dollar remains in its uptrend,” said Imre Speizer, senior market strategist at Westpac Banking Corp. in Auckland. “The Fed remains on schedule to hike this year.”

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major peers, rose 0.1 percent to 1,202.17 as of 1:37 p.m. in Tokyo, after rising to 1,203.18, the highest level since April 15.

The greenback gained 0.2 percent to $1.0931 per euro, after appreciating to $1.0913, the strongest since June 1. It was little changed at 123.80 yen.

“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target,” Yellen said in testimony Wednesday before the House Financial Services Committee in Washington. She will speak to the Senate Banking Committee on Thursday.

Greek Bailout

Greek lawmakers passed a bailout agreement that keeps the country in the euro in a midnight vote in Athens. The result puts the onus on the European Central Bank and other euro-region governments to put in place more emergency funds that will help Greek banks gradually re-open and repair the country’s battered coffers.

Yellen had said in June there could be spillover to the U.S. if there were no agreement between Greece and its creditors.

Fed funds futures show a 67 percent chance the central bank will increase its benchmark rate by year-end from virtually zero, according to data compiled by Bloomberg. The central bank last raised the rate in 2006.

“The Fed is still on the way to hiking this year,” said Tomohisa Fujiki, the head of interest-rate strategy for Japan at BNP Paribas SA in Tokyo. “The dollar should strengthen.”

The U.S. currency may gain to $1.02 per euro and to 130 yen by Dec. 31, Fujiki said.

Kiwi Slides

The New Zealand dollar dropped for a second day after whole milk powder prices plunged 13.1 percent in the GlobalDairyTrade auction, spurring speculation the central bank will cut interest rates again.

Reserve Bank Governor Graeme Wheeler has said that weaker prospects for dairy prices will curb farm incomes and delay inflation returning to his 2 percent target.

Westpac said it expects the RBNZ to cut the official cash rate to 2 percent by the end of the year.

The kiwi slid 1.3 percent to 65.08 U.S. cents, after falling to 65.07, the weakest since July 2009.

The Canadian dollar dropped to a six-year low against the greenback Wednesday after the Bank of Canada cut its benchmark interest rate for a second time this year, and spurred speculation it could augur further stimulus in other commodity- producing nations.

The loonie fell 0.2 percent to C$1.2933 per U.S. dollar after sliding 1.4 percent Wednesday. The Aussie declined 0.2 percent to 73.66 U.S. cents after dropping 1 percent in New York.