Dollar Surges to Seven-Week High After Fed Rate Hike

The US dollar surged to a seven-week high on Thursday after the Federal Reserve raised interest rates and signaled further hikes in the coming months.

The decision was unanimous, with new central bank chief Kevin Warsh joining the majority in voting for the rate hike. Warsh's hawkish tone surprised markets, causing them to reprice policy higher and push the dollar even higher.

Carol Kong, currency strategist at Commonwealth Bank of Australia, said that Warsh 'definitely sounded more hawkish than expected' and that his guidance on future hikes was a surprise to markets.

The dollar's strength pushed the euro down to $1.1463, near a seven-week low, while the pound remained flat at $1.3372 ahead of the Bank of England's meeting later in the day.