The dollar index jumped to a high of 101.51, the strongest level since May 2025

The U.S. dollar extended gains to reach a new 13-month high on Wednesday, as investors sought shelter from a tech stock selloff and prepared ‌for rate hikes from the U.S. central bank.

Stock market volatility continued after a broad selloff of technology and semiconductor sectors dragged world shares lower, sparking safe-haven demand for the dollar and bonds.

Meanwhile, expectations of a U.S. rate hike continued to build with central bank officials sounding increasingly hawkish as the economy remains strong. ​Markets are pricing in a 36% chance of a hike at the July meeting, up from 8.5% a ​week ago, according to CME FedWatch. For September, the chance of a rate rise has risen ⁠above 70% from 29.1%.

The dollar index jumped to a high of 101.51, the strongest level since May 2025.

The U.S. dollar is still the preferred safe ​haven, said Ray Attrill, head of FX strategy at National Australia Bank.

Obviously the momentum is on its side at the moment, but I think there is a lot priced in,” he said. “We’ll have to see a correction in risk sentiment, one that’s broader rather than just ​the tech sector, or the market further ratcheting up its expectations for hikes, before the dollar can go very much ​higher from here, Attrill said.

The euro last traded at $1.1363, near a one-year low. The British pound weakened slightly to $1.3194 after Bank of England policymaker ‌Alan Taylor said ⁠an “extended hold” for interest rates was the right response to inflation pressures.

The risk-sensitive Australian dollar was steady at $0.6918, an 11-week low, as mixed inflation data muddied bets on a rate hike. The New Zealand dollar weakened roughly 0.3% to $0.5654, a new seven-month low.