The dollar index rose to about 99.7 on Wednesday, approaching a one‑month high as investors awaited the latest Federal Reserve policy decision. The central bank is widely expected to deliver its first interest rate hike in roughly three years, with markets pricing in about a 92% chance of a 25-basis-point increase as policymakers move to contain inflationary pressures.
Market participants are also looking for guidance on the prospect of another rate hike later this year, with expectations coalescing around a possible move in October or December. At the same time, some analysts warned that the dollar could weaken sharply if the Fed refrains from signaling additional tightening or decides to leave rates unchanged.
The dollar’s advance came alongside a climb in Treasury yields, driven by rising energy prices, mounting inflation risks, and growing fiscal concerns. The yield on the US 10-year Treasury briefly exceeded 5%, its highest level since 2007.
