The dollar’s gains after the Federal Reserve’s interest-rate decision Wednesday probably won’t extend much further unless upcoming U.S. economic activity and inflation data exceed expectations, MUFG Bank says. The Fed paused rate rises but signaled two more increases. However, the Fed should end rate hikes soon as evidence of disinflation pressures continue building, MUFG currency analyst Lee Hardman says in a note.

While the Fed may lift rates in July, “we remain unconvinced” over the need for a second hike as weaker activity and inflation data may encourage the Fed to signal sufficient policy tightening has been delivered at Jackson Hole over the summer and/or at September’s Fed meeting, he says. The DXY dollar index rises 0.2% to 103.173.