Dollar Steadies Near Two-Month High Amid Rate Hike Expectations

The US dollar held steady near its two-month high on Wednesday, supported by growing expectations of interest rate hikes from major central banks. The euro and British pound remained at their lowest levels since late July, trading at $1.1446 and $1.3337 respectively.

Currency markets are closely watching the latest wave of rate hikes and hawkish commentary from central banks, as well as the ongoing conflict in the Middle East, which has pushed oil prices higher and fueled inflation concerns.

Kieran Williams, head of Asia FX at Intouch Capital Markets, noted that the dollar's support from interest rates appears solid, but futures markets are pricing in a faster pace of tightening than the Federal Reserve itself has projected. This means the dollar now needs data to confirm its trajectory.