The U.S. dollar rose to seven-week highs against a currency basket on Wednesday, driven by rising Treasury yields with the U.S. 10-year bond yield reaching its highest level since early 2014.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.31% to 90.84 by 03:56 AM ET (07:56 AM GMT), its highest level since March 1.

The dollar was boosted by rising U.S. yields and the prospect of a faster pace of rate hikes by the Federal Reserve this year.

Expectations of higher interest rates make the dollar more attractive to investors seeking yield. The yield on 10-year U.S. Treasury notes rose above 3% for the first time since 2014 on Tuesday, a sign of confidence in the outlook for the U.S. economy.

Data on Tuesday showing that U.S. new home sales and consumer confidence were both stronger underlined expectations that the economy will continue to grow in the coming months.

The dollar hit fresh two-and-a-half month highs against the yen, with USD/JPY rising 0.38% to 109.23.

The dollar pared early gains against the yen on Tuesday as declines in U.S. equities bolstered safe haven demand for the Japanese currency. Wall Street ended sharply lower amid warnings by companies of higher costs arising out of the surge in bond yields.

The euro was lower against the dollar, with EUR/USD down 0.29% to 1.2197, within sight of Tuesday’s two-month trough of 1.2181.

Investors were looking ahead to the European Central Bank’s monetary-policy meeting on Thursday to gauge whether officials are growing more confident on the inflation outlook.

The pound approached its recent five-week lows, with GBP/USD losing 0.21% to trade at 1.3948.

The Australian and New Zealand dollars plumbed fresh four-month lows, with AUD/USD down 0.41% to 0.7572 and NZD/USD off 0.56% at 0.7079.