Dollar Index Hits Two-Week High as Data Boosts Fed Hike Expectations

The U.S. dollar index reached a two-week high as positive economic data indicated a strong labor market and potential for further interest rate hikes by the Federal Reserve. Weekly jobless claims dropped significantly, and the revised first-quarter GDP estimate exceeded expectations. Fed Chair Jerome Powell and other central bank heads expressed support for rate hikes, citing resilient economic performance. However, concerns about inflation persist, with Powell not expecting it to reach the Fed’s target until 2025. European data showed mixed inflation figures, highlighting the central banks’ cautious approach.