The dollar rose to a one-month high on Friday as investors rushed to the safe-haven asset.
The dollar index has gained 2.1% so far this week and is headed for a weekly increase for the first time since March 2020.
The strong performance was the result of another round of Fed officials repeating their commitment to raising interest rates to cool inflation.
Rate hikes of 50 or 75 basis points in September would be a reasonable way to tame inflation, according to the president of the San Francisco Fed. The Fed could keep raising rates into the future.
Consumers rely on the Fed to not introduce too much volatility. If rates go rapidly up and then come down, it's the worst thing you can have. She said that it causes a lot of caution and uncertainty.
The Fed shouldn't "drag out" the process of raising rates into next year according to the St Louis Fed President.
"We should continue to move quickly to a level of the policy rate that will put significant downward pressure on inflation" and "I don't really see why you want to drag out interest rate increases into next year."
The Fed's rhetoric has caused investors to pile into the dollar as it suggests the central bank will act to keep the economy under control. Policymakers said in the July minutes that the Fed will keep raising rates to ward off inflation.
The improvement in financial conditions we have seen since the June lows in equity markets would be snuffed out by a continued rise in the US dollar.
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