The dollar remained near multi-year highs on Monday, buoyed by expectations of continued aggressive monetary policy tightening by the Federal Reserve. The dollar index, which measures the greenback against a basket of six major currencies, was trading just below its recent peak.

The Fed’s hawkish stance, aimed at curbing inflation, has been a key driver of dollar strength. Investors anticipate further interest rate increases in the coming months, making the U.S. dollar an attractive investment.

Other factors supporting the dollar include its safe-haven appeal amid global economic uncertainty and geopolitical tensions. Concerns about slowing global growth and the ongoing war in Ukraine have increased demand for the dollar.

Analysts are closely monitoring upcoming economic data releases, including inflation figures and employment reports, for further indications of the Fed’s likely course of action. These data points will be crucial in determining the dollar’s trajectory in the near term.

However, some analysts caution that the dollar’s strength could eventually become a headwind for the U.S. economy, making exports more expensive and potentially dampening economic growth.