FX.co ★ Dollar Stays Firm Against Peers On Rate Hike Bets

The U.S. dollar continued to climb higher on Wednesday amid bets the Federal Reserve will hike interest rates by 50 basis points in May and the following months as well, to rein in inflation.

Worries about growth due to the impact of the ongoing war in Ukraine and the coronavirus restrictions in China also appear to be prompting traders to seek the safe-haven currency.

In U.S. economic news, pending home sales in the U.S. decreased for the fifth straight month in March, according to a report released by the National Association of Realtors.

NAR said its pending home sales slumped by 1.2% to 103.7 in March after plunging by 4% to a revised 105.0 in February. Economists had expected pending home sales to tumble by 1.6%.

The dollar index surged to 103.28, a fresh 25-month high, before easing a bit and paring some gains. Still, at 102.98, the index was up as much as 0.66% from the previous close.

Against the Euro, the dollar firmed to $1.0560 from around $1.0640.

The dollar strengthened to $1.2544 against Pound Sterling from $1.2580. The dollar fetched 128.42 yen a unit, up from 127.25 yen Tuesday evening.