Every one worried about FED rates

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SINGAPORE (Reuters) - The U.S. dollar stood by a fresh 20-year peak on Tuesday and just about everything else nursed losses as investors braced for aggressive Federal Reserve rate hikes and a possible recession.

After a hot U.S. inflation reading on Friday, markets have scrambled to price in steeper hikes. Futures are priced for a 93% chance that the Fed delivers its biggest hike in nearly three decades on Wednesday and raises rates 75 basis points.

As stocks and bonds were dumped, the dollar surged and overnight it hit one-month highs on the euro, Australian dollar, New Zealand dollar, Swiss franc and Canadian dollar. [MKTS/GLOB]

The U.S. dollar index scaled a two-decade peak of 105.29 and was hovering just below that in early Asia trade. The euro sat at its overnight low of $1.0405, while the Aussie steadied at $0.6943. [AUD/]

Sterling touched a two-year low of $1.2109 overnight and held near there at $1.2145 on Tuesday. [GBP/]

"The market was over-invested in the idea that inflation has peaked," said Societe Generale strategist Kit Juckes.

"The policy challenge is that the Fed has no idea how much monetary tightening is needed and will only find out it has done too much, long after the event."

Dollar towers as traders brace for hawkish Fed

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