Dollar Surges to Two-Month High Amid Fed Hike Expectations

The US dollar has reached a two-month high after strong economic data and a hawkish shift in Federal Reserve rhetoric led to expectations of additional interest rate hikes. The dollar's strength sent the euro to a two-month low, while the Swiss Franc fell against the dollar following the Swiss National Bank's decision to leave rates unchanged.

The Norwegian crown rose after the central bank raised its policy interest rate by 25 basis points to 4.50%, with economists noting that Norges Bank remains the most hawkish in advanced economies. The dollar was up 0.28% against the yen, reaching its highest level since September 3.

Market analysts expect the dollar's rise to continue, but some caution that any upside surprise in upcoming US data releases could prompt markets to fully price in an October Fed hike and prop up short-term rates even more.