Dollar Index Surges Past 100 as Fed's Hawkish Stance Takes Hold

The US dollar index has surpassed 100 for the first time since July, driven by the Federal Reserve's hawkish dot plot and higher interest rates. The index rose to 100.05 on Wednesday, up 0.06% from the previous session, with a strong rally that began after the Fed's rate hike in August.

The dollar's move is largely attributed to the dot plot, which showed 16 of 18 officials expecting at least one more interest rate increase this year and a median 2026 rate projection lifted to 4.1%. This has led to a repricing of swap markets, with over 0.90 percentage points of additional tightening expected by summer 2027.

Every major currency is weaker against the dollar today, including the euro and pound ahead of the Bank of England's decision. The yen, however, is drifting weaker despite a Bank of Japan hike to 1.25%, its highest policy rate in about 31 years.