The dollar index climbed toward 104.5 on Monday, inching closer to its highest levels in 20 years, boosted by higher-than-expected US inflation data which drove expectations of even more aggressive monetary tightening. US consumer prices unexpectedly accelerated to a fresh 40-year high of 8.6% in May, raising the likelihood that the Federal Reserve would continue with its 50-basis point rate hikes through September to combat inflation. The Fed is expected to deliver its second straight half-point rate increase when it meets on Wednesday. Investors will also be watching moves from other major central banks, with the Bank of England set to lift interest rates again, while the Swiss National Bank prepares to start its tightening cycle. Meanwhile, the Bank of Japan is expected to retain its ultra-dovish stance despite a rapidly falling yen.
