“The Dollar Surges to Two-Month High Amidst Possibility of Interest Rate Increases”

The dollar recorded its highest level in two months, Tuesday, in line with the rise in US Treasury yields, as investors prepare for the possibility of taking further measures to raise interest rates, after statements in support of that by US Federal officials.

James Bullard, President of the Federal Reserve Bank of St. Louis, and Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, indicated Monday that the central bank may have to continue raising interest rates if inflation remains high.

“The focus is gradually returning to inflation and all this hawkish talk we’re hearing from the Federal Reserve, and that gives the dollar some support here,” said Edward Moya, senior market analyst at OANDA in New York.

The officials’ remarks came after statements that the market considered in favor of monetary easing from the Federal Reserve Chairman, Jerome Powell, on Friday.

currency movements

The dollar index, which measures the performance of the US currency against a basket of major currencies, rose to 103.65, its highest level since March 20, and reached 103.33 in its latest trading.

The US currency also rose against the Japanese yen to 138.91 yen, its highest level since November 30, before retreating slightly to 138.35.

The euro fell 0.18% to $1.0794, holding above a two-month low of $1.0760 hit on Friday.

The Australian dollar fell 0.35% to $0.6627, and the New Zealand dollar fell 0.37% to $0.6261.