• The DXY Index is recording mild gains, hitting a high since early November at 106.1.
• Investors are focusing on Fed Chair Powell's hawkish stance and US Treasury yields at multi-month highs.
• The Fed’s Beige books, set to be released later in the session, will be closely watched.

The US Dollar Index (DXY) stands at 106.10, showing mild gains. The shift in the index's trend appears influenced by several factors including strong growth and persistent inflation in the US, as well as increased hawkishness from Federal Reserve (Fed) officials.

The US economy is seeing sticky inflation and robust growth. Fed Chair Powell's hawkish stance shows that instead of another rate hike, the Fed favors market tightening through higher yields and wider spreads, which strengthens the USD. However, with financial conditions still loose, further tightening is required and Powell commented on Tuesday that the monetary policy may need additional time to work.