Dollar Surges to Six-Week High as Fed Signals Further Rate Hike

The US dollar strengthened this week, reaching its highest level in six weeks. The dollar index DXY, which measures the greenback against a basket of major currencies, rose by 0.71% over the past week and is now up about 2.22% for the year to date.

The dollar's gain was largely driven by the Federal Reserve's decision to raise interest rates by 25 basis points to 3.75-4%, signaling another rate hike this year. This move boosted confidence in the Fed's commitment to curbing inflation.

The yen was a major loser, falling 1.39% against the dollar as markets expect Japan's tightening pace to lag behind the Fed's. The Japanese currency weakened past 157 per dollar on Friday, hitting two-week lows despite the Bank of Japan's own rate hike.