The dollar index reached a new peak today, marking its highest point in two years. This upward trend is largely fueled by strong economic indicators released recently, bolstering investor sentiment in the U.S. economy.

Market analysts suggest that anticipation of continued interest rate increases by the Federal Reserve is also contributing significantly to the dollar’s strength. Higher interest rates typically attract foreign investment, thereby increasing demand for the dollar.

The dollar index is a measure of the value of the U.S. dollar relative to a basket of six foreign currencies: the Euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. A higher index value indicates a stronger dollar.