Dollar Soars on Strong Manufacturing Data and Inflation Fears

The US dollar has reached a two-month high due to strong manufacturing data and rising inflation fears, which have led traders to bet on further rate hikes by the Federal Reserve.

A purchasing managers' report showed that the US economy is experiencing growth, but at a pace that may be too rapid for comfort. This has sparked concerns about inflation, with many economists predicting that the Fed will raise interest rates again in October.

The dollar's strength has pushed other currencies lower, including the euro and sterling, which have fallen to two-month and three-month lows respectively. The yen is also under pressure, despite a recent rate hike by the Bank of Japan.