The US dollar spot index climbed to its highest level since November on Tuesday, as traders intensified their expectations for Federal Reserve interest rate increases this year.

The dollar spot index rose by 0.4%. The greenback found support as the outlook for Fed policy diverged increasingly from that of other major global central banks. Traders now anticipate that the US will implement cumulative hikes of nearly 50 basis points by early 2027, equivalent to almost two standard 25-basis-point increases.

Jordan Rochester, a strategist at Mizuho International, commented, "The dollar has further room to appreciate. The currency typically strengthens ahead of Fed rate hikes, and the market is currently weighing the possibility of the central bank initiating its tightening cycle in September."