The dollar index rose above 98.3 on Friday after hitting a 1-week low of 97.7 in the previous session, as investors braced for the Federal Reserve meeting scheduled next week where it is widely expected to raise interest rates by 25 basis points after another hot inflation report. The annual inflation rate in the US accelerated to 7.9% in February, matching expectations but rising to a fresh 40-year high.
The data came amid global concerns over a commodity-driven rise in inflation spurred by the Russia-Ukraine war, leaving central banks with a balancing act between curbing inflation and supporting growth. Meanwhile, the dollar also benefited from safe-haven flows after the first round of talks between the Russian and Ukrainian foreign ministers failed to yield a ceasefire.
