Traders boost bets on a 2024 Fed rate increase after hawkish projections, lifting the dollar and pressuring the yen to two-year lows.
The U.S. dollar index reached a one-year high as Federal Reserve policymakers signaled potential rate hikes this year, fueling market expectations. Nearly half of Fed officials now anticipate at least one increase, up from prior projections, amid persistent inflation concerns.
Fed funds futures reflect a 69% probability of a September hike, driven by stronger-than-expected U.S. economic data, including robust payrolls and declining unemployment claims. The yen fell to its weakest level in two years, prompting warnings from Japanese authorities.
The euro dropped 0.17% to $1.1479, while sterling declined 0.35% to $1.3245, both hitting multi-month lows against the strengthening dollar.