Dollar Hits Seven-Week High as Hawkish Fed and BOJ Loom

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

According to Carol Kong, currency strategist at Commonwealth Bank of Australia, 'Warsh definitely sounded more hawkish than expected, and the fact that he provided guidance on future hikes surprised the markets, causing them to reprice policy higher, which ultimately pushed the dollar higher.'

The dollar's strength was accompanied by a rise in US Treasury yields, with the greenback appreciating against major currencies.

Attention is now focused on the Bank of Japan, which is expected to raise interest rates to a 31-year high and signal its readiness to continue tightening monetary policy to combat inflation pressures.