Dollar hits two-month peak on strong PMI data, inflation concerns

The dollar has reached a two-month high, buoyed by strong manufacturing data that has triggered fresh concerns about inflation and potential interest rate increases. A weak Treasury auction has pushed yields higher, making the dollar more attractive to investors.

The euro and sterling have both fallen to their lowest levels against the dollar in two and three months respectively. The robust manufacturing activity signals potential economic overheating in the U.S., reinforcing expectations of tighter monetary policy ahead.