Dollar Holds Near Highs as Fed Keeps Hawkish Tone

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On May 20, 2026, the dollar stayed firm near recent highs after Federal Reserve minutes showed growing support for further rate hikes. Weak Australian jobs data added pressure across currency markets.

Dollar Steady as Fed Signals More Rate Risks

The dollar held close to six-week highs after Federal Reserve officials signaled inflation could require additional tightening. Rising energy prices and ongoing Middle East tensions continued to support the greenback.

The Australian dollar fell 0.5% after unemployment unexpectedly jumped to a four-and-a-half-year high, strengthening expectations that the Reserve Bank of Australia may pause rate hikes in June.

“Higher rates may not be over yet” became the dominant theme across currency markets as traders reacted to the Fed’s hawkish tone.

Elsewhere, the Japanese yen remained stable following solid trade and PMI data, while euro and British pound traded mostly flat.