LONDON, June 25 The dollar headed on Thursday for its biggest monthly gain in almost a year, ahead of U.S. inflation data that could support many investors’ growing belief that the Federal Reserve will need to raise rates at least once this year.
The dollar hit a 13-month high against the euro on Wednesday, leaving the single European currency below $1.14
It also sent the pound to seven-month lows and kept the Japanese yen around its weakest in 40 years, around 161.9. Dollar strength has pushed gold briefly below $4,000 an ounce for the first time in more than seven months and sent bitcoin under $60,000 for the first time since 2024. The dollar index, which measures the U.S. currency against a basket of six others, was around 101.5 on Thursday, after touching a 13-month peak of 101.8 the previous day.
Traders who before the U.S.-Israeli war on Iran had expected the Fed to cut rates this year, now see one hike as soon as October and a 50/50 chance of a second by year-end. This month alone, 2-year U.S. Treasuries, which track short-term rate expectations, have risen 14 basis points to 4.16%, compared with just a 2-bp rise in benchmark German 2-year yields to 2.56% and a near-9 bp fall in UK gilt yields.