The dollar is on track for its best weekly performance in three months.

BlockBeats news, September 19 — The US dollar is poised for its best weekly performance in three months after the Federal Reserve signaled further interest rate hikes. Driven by solid US economic growth and the Fed's anti-inflation stance following rate increases, the US Dollar Index DXY rose about 1.1% this week.

After the Fed's first rate hike in more than three years, JPMorgan, Standard Chartered, and Brown Brothers Harriman all agreed that the decision removed the biggest obstacle to a stronger dollar. On Wednesday and Thursday, the dollar index consolidated near its 200-day moving average, and on Friday it edged slightly above this key level. Historical data shows that when the dollar index's daily closing price breaks above the 200-day moving average, the dollar often tends to rise further.

Previously, in March and June, the index strengthened further after breaking above its 200-day moving average. As the yen narrowed its losses following reports that the Bank of Japan conducted a "rate check," the dollar index gave back some of its weekly gains. It had previously been on track for its largest weekly gain since the outbreak of the Iran war in March. A BOJ rate check is typically seen as a precursor to official intervention.