Dollar Rips Higher as Fed Hikes Rates and BOJ Decision Looms

The US dollar continued its upward trend on Thursday, reaching a seven-week high as investors reacted to the Federal Reserve's decision to raise interest rates and hint at more hikes in the coming months.

The Fed's unanimous decision was led by new central bank chief Kevin Warsh, who sounded 'more hawkish than expected' according to Carol Kong, currency strategist at Commonwealth Bank of Australia. Warsh provided guidance on future hikes, causing markets to reprice policy higher and push the dollar even higher.

The dollar index, which measures the greenback against a basket of currencies, last traded at 100.33, its strongest level since July 31. The euro fell to US$1.1456, near a seven-week low, while sterling was flat at US$1.3377 ahead of the Bank of England's meeting later on Thursday.

The attention is now shifting to the Bank of Japan, which is expected to raise interest rates to a 31-year high on Friday and signal its readiness to keep pushing up borrowing costs. Markets will focus on any hints BOJ Governor Kazuo Ueda gives on the timing and pace of any further increase.

In cryptocurrencies, bitcoin was flat at US$76,562.25.