The dollar index firmed up above 106.5 on Thursday, hovering near its highest levels in three weeks, after Federal Reserve officials at their July meeting indicated their commitment to raise interest rates into restrictive territory to bring inflation substantially lower. However, US policymakers did not provide specific guidance for future increases and said that rate decisions would be based on incoming economic data, as well as assessments of how the economy is adapting to rising interest rates. Markets are currently priced for a half-percentage point rate hike in September, with some speculations for a bigger 75 basis point increase, while expecting rates to hit a peak around 3.7% by March and stay there until later in 2023.
