U.S. Dollar Rises Near 1% as Fed Signals Potential Rate Hike Later in 2026

On June 17, the Federal Reserve held its benchmark rate at 3.5%-3.75% unchanged while signaling that officials expect a possible rate hike later this year to address persistent inflation pressures. The U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, climbed nearly 1% to 100.38. The Federal Open Market Committee's decision, the first under new Fed Chair Kevin Warsh, reflected officials' expectation of one 25-basis-point rate increase by year-end, according to updated economic projections. The euro fell 0.5% against the dollar to 1.1554 after the decision. ING analysts noted that dollar strength increasingly depends on market conviction that policymakers remain open to tightening, with potential sharp pullback if Warsh or the FOMC signal otherwise.
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