Bloomberg Dollar Index Hits Highest Level Since November, Traders Raise Bets on Fed Rate Hike

The Bloomberg Dollar Spot Index rose to its highest level since November last year on Tuesday, as traders further strengthen their expectations for a Fed rate hike this year. The Bloomberg Dollar Spot Index rose 0.4%. With the Federal Reserve's policy outlook increasingly diverging from other major central banks around the world, the dollar is gaining support. Traders currently anticipate that by early 2027, the US will have raised rates by nearly 50 basis points, equivalent to close to two 25-basis-point hikes. Jordan Rochester, a strategist at HSBC International, said, "The dollar still has room to rise further. The dollar typically strengthens before a Fed rate hike, and the market is currently considering the possibility of a rate hike cycle starting in September."