Dollar Hits Seven-Week High as Fed Hikes Rates Amid Global Inflation Pressures

The US dollar surged to a seven-week high on Thursday after the Federal Reserve raised interest rates and hinted at further hikes in the coming months.

The decision, led by new central bank chief Kevin Warsh, was unanimous and marked a hawkish stance. The Fed's officials projected one more increase in 2026 and validated a path of continued policy tightening.

The dollar's strength pushed the euro to $1.1463, near a seven-week low, while sterling remained flat at $1.3372 ahead of the Bank of England's meeting later on Thursday.

The Japanese yen hovered near a two-week low at 155.98 per dollar as markets awaited the Bank of Japan's decision on Friday. The BOJ is expected to raise interest rates to a 31-year high and signal its readiness to keep pushing up borrowing costs.