Bank of America (BofA) has reported that the US dollar has made substantial gains in recent weeks, appreciating against all G-10 currencies. BofA sees the US dollar's rise comes amidst 1- persistent robustness in US economic data, 2- mixed or slightly softer European data, and 3- evolving expectations from the Federal Reserve regarding the imminent terminal interest rate.

US data has continued to present a no-landing scenario for the country's economy for the time being. Meanwhile, April's economic figures from China have tempered the reopening narrative that was partly fueling the bearish outlook for the US dollar earlier this year.

In addition, commentary from multiple members of the Federal Open Market Committee (FOMC) has maintained the discussion about possible further hikes, potentially as soon as the FOMC's June meeting. Current market predictions estimate around a 35% chance of a 25bp hike at this upcoming meeting.

While the looming debt ceiling negotiations have garnered considerable market attention, the resilience of the US economy seems to be driving the US dollar's surge.