The dollar rose to multi-month highs against most other major currencies on Wednesday after US Federal Reserve Chairman Jerome Powell warned that interest rates may need to be raised faster and higher than expected to rein in stubborn inflation.

The dollar index rose 0.2% in Asian trading, to its highest level in more than 3 months at 105.86.

The dollar surpassed the 200-day moving average against the Japanese yen for the first time this year, rising 0.5% to a three-month high of 137.79 yen.

Against the single European currency, the US currency recorded its highest level in two months at $1.0528 per euro, extending Tuesday's jump of 1.2%. The pound sterling, the Swedish and Norwegian kroner, the Chinese yuan, the Canadian, Australian and New Zealand dollars also fell to their lowest levels in several months against the dollar.

The pound fell slightly to $1.1811, its lowest level since late November.

The Chinese yuan recorded its lowest level in more than two months at 6.9782 per dollar, just steps away from the remarkable level of seven yuan per dollar.

The Australian dollar also fell after the Reserve Bank of Australia softened its tone on the path of interest rates. After falling 2% on Tuesday, it has retreated slightly from its four-month low of $0.6568 on Wednesday.

Yesterday, Powell told lawmakers in Congress that the latest US economic data came out stronger than expected, and thus the speed and magnitude of future interest rate hikes may be needed.

Powell's comments also sent short-term interest rate expectations higher, with traders now seeing a near 70% chance of a 50 basis point hike in the US interest rate in March, according to CME's Fed Watch, up from about 30% on the day. the previous.

Since last March, the US Central Bank has raised interest rates from nearly zero to the current range of 4.50 to 4.75% to reduce inflation from its highest level in 40 years, which it reached in mid-2008.
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But it slowed the pace of increase to a quarter of a percentage point at its latest meeting, after a string of big increases over most of the past year