Dollar's Rally Continues Amid Inflation Concerns

The dollar extended its rally for a fifth straight day and is on track for its biggest weekly gain in two months. This comes as market expectations shift due to the Federal Reserve's possible rate hikes, with the U.S. 10-year Treasury note yield peaking at 4.581%.

The dollar index, which compares it against other major currencies, climbed by 0.29% to 99.23. The euro dropped 0.35%, hitting its lowest level in weeks. Analysts suggest that rising concerns about inflation are driving these market shifts.

The focus remains on the Federal Reserve's handling of inflation, with several Fed officials emphasizing its importance. The recent escalation in inflation expectations partly reflects the impact of high oil prices and geopolitical tensions, particularly in the Strait of Hormuz.

(With inputs from agencies.)