(Bloomberg) -- The dollar rallied back near its 2022 high following comments from Federal Reserve Chair Jerome Powell, who signaled that the central bank is ready to raise interest rates at its next meeting in March.

The Bloomberg Dollar Index rose as much as 0.5% during Powell’s press conference, within striking distance of its year-to-date high on Jan. 6. His comments supported market speculation that the Fed will raise rates several times this year in the face of the fastest inflation in a generation.

The greenback tracked U.S. Treasury yields higher, with two-year yields surging more than 10 basis points to 1.12%, the highest since February 2020. Dollar gains were concentrated against the low-yielding yen and euro. 

Foreign-exchange traders came into the new year expecting continued dollar strength from a hawkish Fed pivot, making the long-dollar trade one of the most popular bets.

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