The background of U.S. monetary policy is favorable for the dollar, and interest rate hike expectations support the dollar index

According to a report by Jinshi, Zaheer Anwari, an analyst at Revacy Fund, pointed out that the outlook for interest rate hikes in the U.S. supports the dollar due to high energy prices. He stated that persistent inflationary pressures have led the market to form the expectation that "interest rates will remain high for a long time." LSEG data shows that the U.S. money market has fully priced in the expectation of a 25 basis point rate hike by the Federal Reserve before March 2027, and the market believes there is a 62% probability of a rate hike by the end of 2026.