The dollar index, which measures the greenback against a basket of six major currencies, rose 0.3% to 93.15. The gains were primarily driven by increased confidence that the U.S. tax reform bill would pass, potentially stimulating economic growth.

Recent economic data, including strong manufacturing figures, further supported the dollar. The Institute for Supply Management (ISM) reported that its manufacturing index rose to 58.2 in November, exceeding expectations.

However, some analysts remain cautious, citing potential headwinds for the dollar, including concerns about the long-term impact of the tax cuts on the national debt.

Key Factors Influencing the Dollar

• Tax Reform: Progress on the tax bill is a major driver.
• Economic Data: Strong economic indicators support the dollar.
• Federal Reserve Policy: Expectations for future interest rate hikes also play a role.

Analyst Commentary

“The dollar is benefiting from a combination of factors, including tax reform optimism and positive economic data,” said John Smith, a currency strategist at a major investment bank. “However, the path forward is not without its challenges.”