- The US dollar hit a seven-month high on the Bloomberg Dollar Spot Index.
- The spike comes ahead of an expected Federal Reserve rate hike.
- Follow the dollar in real time here.
The US dollar soared to a seven-month high against a basket of currencies on Wednesday ahead of the Federal Reserve's June meeting, where officials are expected to raise key rates.
The dollar has climbed on the Bloomberg Dollar Spot Index for three straight sessions, bringing it to its its highest point since November.
The Federal Reserve is expected to raise interest rates by 25 basis points at a 2 p.m. meeting Wednesday, after data showed consumer prices in the US rose last month at the fastest pace in six years. Consumer prices rose 2.8% year-over-year in May, a rate not seen since February 2012, the Labor Department reported Tuesday.
Investors have priced in Wednesday's rate hike, according to analysts, and are more so looking for soft signals in a monetary policy statement by Fed Chair Jerome Powell that could point to whether the central bank will raise rates one or two more times this year.
"With inflation jumping to a six-year high in May and the US economic outlook being encouraging, it will be interesting to see if there is an upgrade to the 'dot-plot' forecasts," Lukman Otunuga of FXTM said. "If the Federal Reserve expresses optimism over the health of the US economy and offers fresh insight into rate hike timings beyond June, this could be viewed as hawkish by market players."
Pressure in emerging-market currencies and a weakening British pound also helped lift the dollar to fresh highs, according to Vassilis Karamanis of Bloomberg.
The greenback is up 2% on this year versus a basket of its major peers.
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- The Turkish lira is rallying after its central bank hiked rates to 17.75%
- Canada's trade surplus with the US widened in April