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By Bloomberg

The dollar was set for its best week in two months after Federal Reserve Chair Janet Yellen reaffirmed she expects the central bank to raise rates this year for the first time in almost a decade.

The greenback is the best performer against its nine- developed nation peers over the past month as receding concerns over Greece and China prompt investors to shift focus to U.S. interest rates. The Canadian dollar is less than a cent away from its lowest since 2009 after the central bank cut rates this week.

“Good data, receding risks from China and Greece and Yellen’s testimony are underpinning the dollar,”said Kumiko Ishikawa, a Tokyo-based analyst at Gaitame.com Research Institute Ltd. “Moves in the euro are also dollar-driven.”

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against its 10 major peers, was at 1,204.22 at 11:47 a.m. in Tokyo from 1,205.22 in New York, the highest close since April 13. The gauge has risen 1.3 percent this week, the most since a 2.6 percent advance in the five days to May 22.

The U.S. currency was little changed at 124.11 yen, 1.4 percent from the 13-year high of 125.86 touched on June 5.

Yellen Testimony

The dollar is around its strongest in at least six years against all except the pound and franc among Group-of-10 most-developed nation currencies.

Yellen told lawmakers on Thursday that waiting too long to raise interest rates holds risks for the U.S. economy, as does tightening too quickly. She made plain over two days of testimony before Congress that she believes the central bank can raise interest rates in 2015.

“Yellen’s testimony turned out to be an event to confirm a rate hike this year, keeping the dollar buying trend,” said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank Ltd. in New York. “Markets are likely to keep buying the dollar on monetary policy divergence.”

The euro gained 0.2 percent to $1.0890, and is about 4 percent from the 12-year low reached on March 16.

The shared currency fell to a seven-week low against the dollar Thursday as European Central Bank President Mario Draghi reiterated his commitment to providing unprecedented stimulus to the euro area. The ECB kept its refinancing rate at a record-low 0.05 percent and the deposit rate at minus 0.2 percent.

Greek lawmakers on Thursday approved new austerity measures that are conditional for a bailout to keep the country in the euro bloc. Since then, euro-area finance ministers agreed in principle to extend a 7 billion-euro ($7.6 billion) bridge loan to Greece, according to an official familiar with the decision.

The Canadian dollar was at C$1.2961, after dropping to C$1.2973, the weakest since March 2009.

The Bank of Canada reduced its benchmark interest rate on Wednesday for the second time this year as falling oil prices shrank the economy in the first half. The central bank lowered the rate on overnight loans between commercial banks to 0.5 percent from 0.75 percent, where it had been since a cut in January.