The greenback reached a one-year high on Friday, buoyed by market expectations of tighter U.S. monetary policy. Traders noted the dollar’s advance despite a recent dip in oil prices following the U.S.–Iran interim peace accord. With U.S. equity and bond markets closed for a public holiday, currency moves took center stage.

The Federal Reserve left its benchmark rate unchanged at 3.5%‑3.75% on Wednesday, but its latest dot‑plot showed nine of 19 officials now forecasting at least one rate rise before year‑end, up from none in March. That shift lifted expectations for higher yields, prompting investors to rotate into the dollar as a safe‑haven asset.

Currency traders interpret the dollar’s strength as a signal that the Fed may keep tightening until inflation pressures ease. A stronger greenback raises import costs for U.S. businesses and can compress profit margins for exporters, while overseas firms face higher financing costs in dollars. The move underscores how monetary projections now dominate short‑term market dynamics.

Investors will watch upcoming Fed speeches and the release of the November jobs report for clues on timing. If officials reaffirm a path toward additional hikes, the dollar could test resistance near the high‑2000 level, pressuring emerging‑market currencies and prompting further capital outflows from risk‑on assets.