(Bloomberg) -- The dollar snapped six weeks of declines against the euro, the longest losing streak in more than six years, as the Federal Reserve signaled it’s moving toward raising interest rates.

The Bloomberg Dollar Spot Index rose for the first week this month after the Fed shifted to more qualitative guidance and policy makers increased forecasts for borrowing-cost levels. The ruble fell for a fifth week as the U.S. and European Union imposed sanctions on Russia in the standoff over Ukraine’s Crimea region. The U.S. economy grew faster in the fourth quarter than previously estimated, data next week may show.

“Growing confidence that the Fed will be tightening in 2015 should drive the dollar higher over coming quarters,” said Chris Turner, head of currency strategy at ING Groep NV in London. “The combination of loosening forward guidance in the Federal Open Market Committee statement and in particular the concentration of views that fed funds would be at 1% by the end of 2015 were the main drivers of the dollar move.”

The dollar gained 0.9% to $1.3794 per euro this week in New York, strengthening from a more-than two-year low of $1.3967 it reached on March 13. The euro gained for the previous six weeks, the longest stretch since July 2007. The U.S. currency rose 0.9% to 102.25 yen. Europe’s shared currency was little changed at 141.04 yen.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency versus 10 major counterparts, gained 0.6% to 1,019.26, its first weekly increase since Feb. 21 and its biggest since Jan. 17.

WINNERS, LOSERS

Brazil’s real and the Australian dollar were the biggest winners among the dollar’s 16 major peers, gaining 0.9% and 0.6%. South Africa’s rand and the Norwegian krone were the biggest losers, falling 2% and 1.3%.

The real gained on bets Brazil’s central bank will keep taking steps to sustain flows from investors in countries where interest rates are at almost zero. The currency ended the week at 2.3251 per dollar.

“The resilience of the real reflects actions recently done by the central bank, such as rate hikes and swap auctions,” Carlos Kawall, the chief economist at Banco J. Safra in Sao Paulo, said March 20 in a telephone interview.

The rand led losses by emerging-market currencies against the dollar after the Fed scaled down the bond-purchase stimulus that has stoked risk appetite worldwide. The South African currency ended the week at 10.8898 per greenback.

FED STIMULUS

The policy-setting FOMC said March 19 after a two-day meeting it would reduce its monthly bond purchases by $10 billion, to $55 billion, amid “underlying strength” in the economy. It was the third consecutive cut of that size. Economists polled by Bloomberg before the gathering forecast the central bank will announce the end of the program in October.

Fed Chair Janet Yellen said at a press conference after the decision she saw a “considerable time” between the end of the Fed’s bond-buying and the first rate increase, meaning “around six months or that type of thing.”

The Fed has held the benchmark interest-rate target at zero to 0.25% since 2008. Central-bank officials estimated the rate will be 1% at the end of 2015 and 2.25% a year later. In December, they forecast 0.75% and 1.75%.

Policy makers also discarded a jobless-rate threshold for considering when to increase borrowing costs and said they will consider instead a wider range of data.

U.S. gross domestic product expanded 2.7% from October through December, versus the previous estimate of 2.4%, economists polled by Bloomberg said before the Commerce Department reports the data March 27.

CURRENCY PERFORMANCE

The dollar has declined 0.2% this year in a basket of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen has gained 3.1%, and the euro has added 0.2%.

“We remain bullish on the dollar,” Athanasios Vamvakidis, head of Group of 10 currency strategy at Bank of America Corp. in London, said yesterday. “If we start to get good U.S. data, the market will be much more comfortable longing dollar.” Long positions are bets a currency will rise in value.

Russia’s currency fell as the nation completed its annexation of Crimea. The U.S. and the EU slapped financial sanctions on Russian officials and allies of President Vladimir Putin. Russia banned entry to nine U.S. officials.

The ruble weakened 0.5% to 43.0570 against Bank Rossii’s target basket of dollars and euros.

'CAN'T WORRY'

“The tit-for-tat sanctions and the war of words could well escalate, but this is going to take quite a long time before it becomes meaningful for any of the parties,” Ken Dickson, an Edinburgh-based director for foreign exchange at Standard Life Investments Ltd., which oversees $305 billion, said in a phone interview. “Therefore the market probably can’t worry about it in the near term. It’s not really, at this point, going to cause a major economic disturbance.”

China’s yuan slumped 1.2% this week to 6.2250, a record weekly decline, as the central bank cut the currency’s reference rate amid concern economic growth is slowing.

The currency slid 1.2% in the first week since its trading band was doubled, the biggest drop in China Foreign Exchange Trade System prices going back to 2007. The decline was also the largest since China unified official and market exchange rates at the start of 1994, according to data compiled by Bloomberg.

The People’s Bank of China lowered the daily fixing by 0.21% this week to 6.1475 per dollar yesterday, the weakest since Nov. 6.