Analysis-Dollar’s rally supercharged by diverging US rate outlook

A rally in the U.S. dollar is accelerating, as stubborn inflation sows doubts over how aggressively the Federal Reserve will be able to cut rates this year compared to other central banks. The U.S. dollar index, which measures the greenback against a basket of six major currencies, is up 4.6% this year and stands near its highest levels since early November. The greenback is advancing as market participants grow convinced the Fed will need to leave interest rates at current levels for longer to avoid a potential resurgence of inflation.