Dollar Surges to Two-Month High Amid Rising Interest Rates and Inflation Concerns
The US dollar continued its two-month rally, reaching a new high on Friday as investors reacted to stronger economic data and expectations of further Federal Reserve rate hikes. Rising Treasury yields also supported the greenback's advance.
The dollar index climbed to its highest level since June 2004, while the benchmark 10-year yield reached nearly two decades high. Initial jobless claims fell by 1,000 to 197,000, below the 201,000 estimate in a Reuters poll.
This has reinforced expectations of another rate hike from the Fed, with several officials indicating that further increases could be needed if inflation fails to moderate. The yen has been under pressure due to these rising interest rates, and is now near the closely watched 160-per-dollar level.