Dollar Hits Sixth Straight Gain as Fed Rate Hike Looms

The US dollar continued its upward trend on Wednesday, rising for the sixth consecutive day as investors await the Federal Reserve's interest rate decision.

The, which tracks the greenback against a basket of six major peers, increased by 0.1% to 99.69 at 12:45 ET (16:45 GMT).

This move comes ahead of the Fed's anticipated 25-basis-point rate hike, its first since July 2023 and the first change in monetary policy since a quarter-point rate cut in December last year.

Rate hike expectations have been building due to strong US economic data, including resilient growth, a robust labor market, and elevated inflation. The personal consumption expenditures (PCE) price index showed a 3.7% Y/Y increase, surpassing the Fed's long-term target of 2%.

The bond market has also played a significant role in boosting rate hike expectations, with Treasury yields surging to multi-year and multi-decade highs due to concerns over inflation, spiking oil prices, and ballooning US fiscal debt.