The US Dollar Index grew 0.07% to 95.237 on Friday morning, remaining just below a record 16 month high of 95.267.While set for its best week in five months, a strong dollar continues to fuel bets that the US Federal Reserve will hike interest rates earlier than expected in response to high inflation.According to Reuters, Investors are now pricing the first rate hike by July 2022 and another in December of the same year.“We still think market pricing has room to firm further, especially in 2023, which can further support USD.”Strategist Kimberley Mundy, Commonwealth Bank of AustraliaThe US Dollar, which tracks the greenbacks against six peers, including the yen and euro, rose further after posting its highest daily jump since March on Wednesday. It followed a higher-than-expected rise in US consumer price data.The Consumer Price Index (CPI) posted its biggest monthly gain in four months to lift the annual increase in inflation to 6.2%, the strongest year-on-year advance since November 1990.TECHNICAL ANALYSISTraders are currently pricing in two rate increases in 2022 and about a 44% probability of a third hike, according to the CME’s FedWatch tool. This increasing probability of rate hikes helps drive up demand for the US Dollar.Matthew Hornbach, Global Head of Macro Strategy for Morgan Stanley, expects inflation to remain buoyed by expectations for continued growth. But, inflation risk premiums will be influenced by factors such as supply chains and labor force participation, he added.In terms of relative growth outlook, progress in the US on COVID-19, and developments on infrastructure spending should place upward pressure on the US dollar through the first half of next year. To learn more about Stock Investments visit MEXEM.Resources: https://www.fxempire.com/forecasts https://www.fxstreet.com/news https://www.investing.com/news/forex-news/dollar-up-near-16month-high-as-bets-on-earlier-central-bank-interest-rate-hikes-2677439 https://www.investing.com/news/economy/asian-stocks-slump-dollar-shines-as-inflation-fears-flare-2676033