Dollar Index Gained 0.4% to 95.915

The U.S. dollar jumped on Friday, after soaring consumer prices lifted expectations the central bank will aggressively hike interest rates this year, starting next month.

The dollar index which tracks the U.S. currency against a basket of currencies added 0.4% to 95.915. 

U.S. consumer prices rose 7.5% year-on-year in the first month of the year, the highest annual increase in 40 years. 

Goldman Sachs now expects 25 basis point interest rate rises from the Federal Reserve, up from its previous forecast of five.

Dollar, yen, euro, pound and rouble

The USD/JPY gained 0.1% to 116.06, after climbing to a five-week high of 116.34 overnight.

The risk-sensitive AUD/USD declined 0.6% to 0.7128. 

The EUR/USD dropped 0.4% to 1.1385, with the euro already weakened by European Central Bank President Christine Lagarde’s position. 

The GBP/USD declined 0.1% to 1.3537. The British pound received some support from economic data. The country’s economy expanded at the fastest pace since World War II in 2021. The gross domestic product (GDP) fell 0.2% in the last month of the year as the Omicron variant hir restaurant and hospitality sectors. However, the economy still expanded by 7.5% in 2021, the most since 1941. 

The EUR/SEK dropped 0.1% to 10.6092, while the USD/SEK gained 0.3% to 9.3164. The U.S. dollar rose against the Swedish crown after Sweden’s central bank maintained its dovish monetary policy stance in spite of the global shift toward tightening. 

The USD/RUB fell 0.1% to 74.9597 ahead of the latest policy meeting by the Bank of Russia. 

Inflation is a serious problem in the Russian Federation and elsewhere.

The country’s central bank is expected to deliver a third 100 basis-point increase in its key interest rate in less than a year later on Friday to 9.5%.