By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The dollar surged to a fresh two-decade high on Wednesday after the Federal Reserve raised interest rates by another 75 basis points, as expected, and signaled more large increases at its upcoming meetings.

The Fed’s new projections showed its policy rate rising to 4.4% by the end of the year, before peaking at 4.6% in 2023 to curb uncomfortably high inflation. Rate cuts are not expected until 2024.

The hit a fresh 20-year high of 111.63 and was last up 1.1% at 111.42.

The euro, the largest component in the dollar index, dropped to a 20-year low, hitting $0.9810. Europe’s single currency last changed hands at $0.9837, down 1.3%.

Against the yen, the dollar posted minor gains compared to other currencies, rising 0.5% to 144.41 yen. Traders were wary of pushing the dollar higher given the threat of Japan intervention to boost the yen.

“They (the Fed) have a brief window to act aggressively, and they seem eager to use it,” said Jan Szilagyi, co-founder and CEO of Toggle AI, an investment research firm.

“There is another reason to frontload the hikes. Public and market tolerance for tighter monetary policy is far higher with the unemployment rate below 4%, a historic low.”

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Currency bid prices at 2:27PM (1827 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 111.2500 110.1700 +0.99% 16.294% +111.6300 +110.1200

Euro/Dollar $0.9851 $0.9969 -1.17% -13.34% +$0.9975 +$0.9810

Dollar/Yen 144.3550 143.7100 +0.45% +25.39% +144.6950 +143.3500

Euro/Yen 142.25 143.28 -0.72% +9.15% +143.5900 +141.8900

Dollar/Swiss 0.9670 0.9640 +0.43% +6.13% +0.9699 +0.9622

Sterling/Dollar $1.1285 $1.1381 -0.83% -16.54% +$1.1384 +$1.1237

Dollar/Canadian 1.3431 1.3368 +0.46% +6.22% +1.3445 +1.3361

Aussie/Dollar $0.6637 $0.6691 -0.78% -8.67% +$0.6703 +$0.6622

Euro/Swiss 0.9525 0.9615 -0.94% -8.12% +0.9618 +0.9517

Euro/Sterling 0.8726 0.8760 -0.39% +3.90% +0.8769 +0.8712

NZ $0.5857 $0.5895 -0.63% -14.42% +$0.5906 +$0.5844

Dollar/Dollar

Dollar/Norway 10.3355 10.3480 -0.07% +17.38% +10.4015 +10.2650

Euro/Norway 10.1887 10.3001 -1.08% +1.76% +10.3120 +10.1640

Dollar/Sweden 11.0499 10.8937 +0.25% +22.53% +11.0974 +10.8877

Euro/Sweden 10.8888 10.8619 +0.25% +6.35% +10.9247 +10.8596