Dollar Hits Seven-Week High on Hawkish Fed Decision

The US dollar rose to a seven-week high on Thursday after the Federal Reserve increased interest rates and reaffirmed its commitment to controlling inflation. The Fed raised rates by 25 basis points, bringing the target range to 3.75-4.00%, and signaled further hikes in 2026.

Fed Chair Kevin Warsh emphasized the central bank's independence despite pressure from US President Donald Trump for lower borrowing costs. This move was seen as a clear intention to recalibrate monetary policy towards a more restrictive stance.

The dollar climbed to its strongest level since July 31, with the dollar index reaching 100.36. However, it later eased as energy prices extended their decline due to reduced fears over supply disruptions.