The U.S. dollar advanced against the euro and other rivals on Wednesday after Federal Reserve Chairman Jerome Powell refused to rule out the possibility of consecutive interest rate hikes as the central bank continues its battle against inflation. The ICE U.S. Dollar Index
a gauge of the dollar’s strength against a basket of its main rivals, rose 0.5% to 103.01. Most of this decline was driven by the euro
which fell 0.5% to $1.09. The Japanese yen
also sank, with the greenback gaining 0.1% to 144.21 yen. Treasury yields didn’t move much on the news, however, as the 10-year yield was off 2.5 basis points to 3.733%. Central-bank chiefs reiterated their intentions to keep policy tight until the inflation dragon has been slain during a gathering of some of the world’s most influential central bankers in Sintra, Portugal on Wednesday. Powell clarified that the Fed hadn’t taken interest-rate hikes at consecutive meetings off the table, even as he said the Fed would likely move forward by allowing for some time in between hikes. The Fed left interest rates on hold at its policy meeting earlier this month following 10 consecutive interest-rate hikes that have increased the central bank’s policy rate by five percentage points.