FX.co ★ Dollar Climbs to More Than One-Year High

The dollar index rose for a second consecutive session on Thursday, climbing to 100.6 and marking its highest level since May 2025. The move came as investors increased bets on additional Federal Reserve rate hikes later this year following a distinctly hawkish policy signal. As expected, the Fed left interest rates unchanged, but indicated growing support for tighter policy ahead. Roughly half of FOMC members now anticipate at least one rate increase in 2026, and the central bank also revised its inflation projections higher, citing the economic fallout from the conflict in the Middle East. Fed Chair Kevin Warsh declined to offer explicit guidance on the timing of the next move, but emphasized that inflation has remained above the 2% target for several years and reaffirmed the Fed’s commitment to restoring price stability. Futures markets now fully price in a rate hike by October. The dollar advanced broadly, with its strongest gains against the British pound and the Swiss franc after both the Bank of England and the Swiss National Bank opted to keep rates on hold.