US dollar index hits 14-year high in the Fed aftermath

The US dollar index, which measures USD performance versus a  trade-weighted basket of six major currencies,  broke above 103.00 and reached its highest level in nearly 14 years on Thursday, as the greenback continued to strengthen on the back of Fed’s decision.

The Federal Reserve decided on Wednesday to raise the target range for the federal funds rate to 0.5-0.75%. While the move was highly anticipated, the dollar strengthened as the dot plot showed most members expect three hikes throughout 2017 versus two hikes seen in September’s meeting.

DXY reached a peak of 103.15 at the beginning of the New York session and it was last trading around 103.02, up 0.76% on the day, while investors attention turns to US CPI data due later.

Data is expected to show consumer inflation rose 1.7% over the 12 months to November, while core CPI is expected to grow 2.2% YoY.