Dollar Strengthens on Strong PMI Data and Hawkish Fed Expectations

The US Dollar has strengthened against major currencies due to strong business activity data and hawkish Federal Reserve expectations.

The preliminary S&P Global Composite Purchasing Managers’ Index (PMI) rose to an eight-month high of 53.6 in July from 51.9 in June, while the Services PMI climbed to 53.6 from 51.2.

This has reinforced expectations that the Federal Reserve may need to raise interest rates, as elevated oil prices keep inflation risks alive.