The dollar jumped Wednesday after US business activity rose at the fastest pace in more than five years, fortifying the case for the Federal Reserve to continue raising interest rates. The Bloomberg Dollar Spot Index rose as much as 0.6%, reaching the highest level since July 30. It is up 1.3% so far this month. US Treasury yields jumped after the data release as concerns over inflation linger. All currencies in the Group of 10 fell against the greenback.

"Fundamentals are lining up for more dollar upside here," said Alex Cohen, a foreign-exchange strategist at Bank of America. "The upside PMI data serve as a reminder of the US economy’s resilience. The trend in US data softness from the summer has abated, expected Fed hikes look more durable than elsewhere." Sentiment around the greenback continues to improve as investors prepare for prolonged strength. Following the Fed’s first rate hike in three years last week, officials have maintained their hawkish stance on inflation.

Historically, the final full week of September has proved to be the dollar’s strongest over the past decade. In that period, the greenback posted the highest median return of any week of the year, data compiled by Bloomberg show. The dollar’s current 0.7% rally for the week starting Sept. 21, considered the last of the month, suggests this year won’t be any different. With the Fed hiking again, the gap in rates between the US and other major central banks is once again widening — supporting the appeal of the greenback, according to Elias Haddad, global head of markets strategy at Brown Brothers Harriman in London.