Dollar Index Hits 11-week High

The dollar index held above the 100 mark on Thursday after jumping nearly 1% in the previous session, as the Federal Reserve left interest rates unchanged but signaled increasing support for rate hikes later this year. Half of FOMC members now project at least one rate increase in 2026, while the central bank sharply raised its inflation forecasts amid the economic impact of the conflict in the Middle East. Meanwhile, new Fed Chair Kevin Warsh declined to offer guidance on the next policy move but stressed that inflation has remained above the Fed’s 2% target for several years and reaffirmed the central bank’s commitment to restoring price stability. On the geopolitical front, President Donald Trump signed an interim agreement to end the war with Iran and reopen the Strait of Hormuz, though it remains unclear whether Iran has already begun implementing measures to fully reopen the critical shipping route.

DXY increased to 100.32, the highest since March 2026. Over the past 4 weeks, Dollar Index gained 1.13%, and in the last 12 months, it increased 1.42%.

The dollar Index rose above 100.3 on Wednesday, the highest since March, as traders digested the latest FOMC decision. The Federal Reserve left interest rates unchanged, as widely expected, in Kevin Warsh’s first meeting as Fed Chair. However, policymakers’ projections were interpreted as more hawkish than anticipated, with roughly half of FOMC members expecting at least one rate hike this year. The Fed also sharply revised upward its inflation forecasts. The 2026 PCE inflation projection was raised to 3.6% from 2.7% in the March forecast, while core PCE inflation is now expected to reach 3.3%, up from 2.7% previously. Traders have now fully priced in a quarter-point Fed rate hike by the end of the year. Meanwhile, Chair Warsh announced changes to the Fed, including five task forces that will address the central bank’s communications, its balance sheet and other issues. The greenback strengthened broadly, posting its largest gains against the British pound and the euro.