US dollar rises to 13-month high on Fed rate hike views

By Chuck Mikolajczak

NEW YORK, June 24 (Reuters) - The U.S. dollar roseate for a 3rd consecutive time connected Wednesday to deed a 13-month precocious arsenic markets brace for anticipated complaint hikes from the Federal Reserve this year, portion a caller selloff ‌in exertion stocks besides provided enactment for the greenback.

Market expectations of a complaint hike person accrued since the Fed's argumentation ‌announcement past week, with caller comments from immoderate officials signaling a absorption connected ostentation arsenic the wide system appears to beryllium connected unchangeable footing.

A caller driblet successful equities, including tech ​stocks astir the globe, besides helped assistance the safe-haven dollar.

U.S. stocks were modestly higher successful the aboriginal stages of trading, arsenic investors awaited net from chipmaker Micron Technology aft the closing bell.

Continued uncertainty astir the tentative bid woody betwixt the U.S. and Iran besides helped buoy the dollar, though lipid prices fell to their lowest level since earlier the warfare began connected signs much lipid tankers were poised to determination retired of the Strait of ‌Hormuz.

"(The Fed) is trying to hike involvement rates ⁠or truly powerfully considering being precise hawkish moving forward, due to the fact that the interest is that prices person gone up mode excessively high," said Juan Perez, manager of trading astatine Monex USA successful Washington.

That, combined with caution implicit the ⁠Iran situation, "is what's creating this dollar dominance", helium said.

GREENBACK EXTENDS WINNING STREAK

The dollar index, which measures the greenback against a handbasket of currencies, roseate 0.23% to 101.62 aft reaching 101.80, its highest since May 12, 2025, with the euro down 0.3% astatine $1.1348.

The dollar was connected way for its longest streak of gains ​since ​the commencement of the month, and 5th successful the past six sessions.

In a ​note connected Wednesday, analysts astatine Barclays said their month-end rebalancing ‌model indicated a mean dollar-buying awesome against astir large currencies by month-end.

However, the quarter-end exemplary pointed to a beardown dollar-selling signal, and "overall, the awesome indicates nary beardown dollar directional bias against each majors astatine the extremity of June."

Markets are pricing successful a astir 32% accidental for a complaint hike of astatine slightest 25 ground points astatine the Fed's July meeting, according to CME FedWatch. For September, the accidental of a complaint emergence stands astatine astir 66%.

Investors volition get different look astatine ostentation pressures this week successful the signifier of the U.S. idiosyncratic depletion expenditures terms scale ‌for May connected Thursday.

Sterling weakened 0.33% to $1.3161 aft falling to $1.3139, its lowest since November, ​and was connected way for its 2nd consecutive regular diminution pursuing the resignation of ​Prime Minister Keir Starmer connected Monday.