Dollar Index Hits 12-month High

The dollar index extended its gains for a second straight session, rising to 100.6 on Thursday and reaching its highest level since May 2025, as investors ramped up bets on Fed rate hikes later this year following a hawkish signal from the Federal Reserve. The Fed left rates unchanged as expected but signalled growing support for tighter policy later this year. Around half of FOMC members now project at least one rate increase in 2026, while the central bank also raised its inflation forecasts amid the economic impact of the conflict in the Middle East. Fed Chair Kevin Warsh declined to provide guidance on the next policy move but stressed that inflation has remained above the 2% target for several years, reaffirming the Fed’s commitment to restoring price stability. Markets are now fully pricing in a rate hike by October. The greenback strengthened broadly, with the largest gains seen against the British pound and Swiss franc after both the BoE and the SNB kept rates unchanged.

DXY increased to 100.72, the highest since May 2025. Over the past 4 weeks, Dollar Index gained 1.39%, and in the last 12 months, it increased 1.83%.

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.