The dollar hits a 13-month high amid interest rate hike bets

The dollar continued to gain, reaching today its highest level in 13 months against a basket of major currencies, as investors seek protection from the risks of a wave of selling in technology company stocks and preparations to raise interest rates by the Federal Reserve (the US central bank).

The dollar index, which measures the performance of the US currency against a basket of currencies that includes the yen and the euro, rose to 101.44, its strongest level since May 13, 2025.

“The US dollar remains the safe haven of choice,” said Ray Attrill, head of foreign exchange research at National Australia Bank.

In the latest trading, the euro recorded $1.1375, near its lowest level in a year. The British pound fell slightly to $1.3199 after Alan Taylor, a policymaker at the Bank of England, said a “prolonged freeze” in interest rates is the right response to inflation pressures.

The highly risk-sensitive Australian dollar settled at $0.6918 before the latest consumer price index reading was released later in the day. The New Zealand dollar fell 0.05 percent to 0.5665 US dollars, recording a new low in seven months.

The yen last traded at 161.57 to the dollar after briefly falling to a two-year low of 161.93 late Monday, with the dollar continuing to make gains.

Exceeding 161.96 per dollar would put the yen at its weakest level since 1986.