Dollar Index Rises Above 101 on Fed Rate Hike Bets

The US Dollar Index (DXY) strengthened above the 101.00 mark during early European trading, currently hovering around 101.30. The move is attributed to growing bets that the Federal Reserve will continue raising interest rates to combat inflation.

The index, which measures the greenback against a basket of six major currencies, has found support from hawkish Fed rhetoric and resilient US economic data. Traders are now pricing in a higher probability of another rate hike at the upcoming FOMC meeting.

If the dollar maintains its upward momentum, it could weigh on risk-sensitive assets and emerging market currencies. Key resistance lies near 101.50, while support is seen at 101.00.