US Dollar Hits Near-Yearly Highs Amid Strong Economic Data

The US Dollar has reached near-yearly highs due to solid economic data and the Federal Reserve's hawkish stance, according to ING. The DXY dollar index is testing its yearly high at 101.80.

This recent strength can be attributed to the cyclical story taking centre stage as the US economy performs reasonably well. Market expectations point to the need for the Fed to tighten policy again.

Firming up this view is the activity side, where consumer spending data holds up and there are signs of accelerating payroll growth. The ADP report released yesterday showed this trend.