LONDON—The dollar scaled multi-month highs against most other major currencies on Wednesday, after Federal Reserve Chair Jerome Powell warned that U.S. interest rates might need to go up even faster and higher than expected to rein in stubborn inflation.
Higher rates benefit the dollar by improving its yield and as traders look for safety while global stock markets drop.
The dollar hit a two-month high against the euro of $1.0524, extending Tuesday’s 1.2 percent jump. Sterling, the Swedish and Norwegian crowns, the Chinese yuan, and the Canadian, Australian, and New Zealand dollars all struck multi-month lows.
The U.S. dollar also broke above its 200-day-moving average against the yen for the first time this year, rising as far as 0.5 percent to a nearly three-month high of 137.9 yen….