The dollar rose to its five-week high against major currencies on Monday as investors anticipated that the U.S. Fed to prolong policy tightening ahead of the announcement of the consumer index tomorrow.
The dollar index which tracks the U.S. currency against six counterparts including the yen, euro and sterling, rose 0.068% to 103.65, slightly lower than Thursday’s high of 103.96 and also its strongest level since January 6.
Strong job data led the market to believe that the U.S. Fed could add one more rate hike in 2023. Federal Reserve Chairman Jerome Powell said last Tuesday that inflation is beginning to drop, but he expects it to be a long process, and he warned that interest rates could climb more than markets predict if the economic data doesn’t cooperate.