LONDON—The dollar soared to its highest levels since July 2020 against other major currencies on Thursday, powered by bets the U.S. Federal Reserve could deliver faster and larger interest rate hikes in the months ahead. A day after the Fed flagged that it was ready to start lifting rates in March to contain inflation, money markets moved to price in as many as five quarter-point increases by year-end. This backdrop bought dollar bulls out in force—the dollar index, which measures the greenback’s value against other major currencies, rose to 97.120, the highest since July 2020. The euro slumped 0.75 percent to $1.1156, its lowest since June 2020. The greenback also hit its highest levels in more than a year against the New Zealand dollar, a seven-week peak against Australia’s currency, and rose broadly against emerging market currencies. The Fed on Wednesday indicated it was likely to raise rates in March, …