Dollar Index Climbs as Fed Hike Bets Rise Amid Inflation Concerns

The US Dollar Index (DXY) has risen to near 99.50, up 0.4% on the day, due to expectations of a Federal Reserve interest rate hike.

Investors are demanding higher returns on American bonds because the government is borrowing more, companies are taking out large loans for artificial intelligence data centers, and crude oil prices above $103 per barrel have pushed inflation above target.

The European Central Bank (ECB) raised rates last week to 2.50%, while the Bank of Japan will do so on Friday, and a quarter-point hike from the Fed would narrow the gap with Europe and Japan next year.