The dollar approached a seven-month peak as hedge funds increased wagers the currency will strengthen amid speculation the Federal Reserve will raise interest rates as soon as next month.

Hedge funds and other large speculators boosted bets on dollar gains versus eight major currencies in the last three weeks, in the biggest jump since March 2013, data from the Commodity Futures Trading Commission showed. The greenback strengthened against seven of its 10 developed-market peers as traders looked to U.S. inflation data due Tuesday for clues on whether the Fed will increase interest rates from near zero next month.

The greenback climbed 0.1 percent to 123.29 yen as of 9:26 a.m. in Tokyo, adding to a 0.5 percent advance from Monday, after Japan slipped into a recession last quarter. It was little changed at $1.0684 per euro after gaining 0.8 percent to $1.0686, the strongest close since April 15, in New York.

The U.S. Dollar Index, which tracks the greenback versus major counterparts, climbed 0.5 percent Monday to 99.442. It reached a seven-month high of 99.504 on Nov. 10.

New Zealand’s dollar slid 0.2 percent to 64.78 U.S. cents, adding to a three-day, 1 percent decline, before a milk powder auction Tuesday.

Source: Bloomberg