NEW YORK: The dollar extended gains against a basket of currencies on Tuesday after Federal Reserve Chair Jerome Powell said that the US central bank will stay the course until the job is done, adding that the ultimate level of interest rates is likely to be higher than previously anticipated.

Powell also said that the Fed is prepared to increase the pace of rate hikes if data indicates it is warranted. That comes after the bank slowed the pace of its tightening to 25 basis points at its last two meetings, following larger hikes last year.

“Powell is explicitly talking about a higher target for interest rates. This is something that the market has been talking about but obviously hasn’t been fully priced in,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.