The dollar extended gains on Thursday after the U.S. Federal Reserve surprised markets by signaling it would raise interest rates and end emergency bond-buying sooner than expected.

Fed officials on Wednesday projected an accelerated timetable for rate increases, began talks on how to end the emergency bond-buying, and said that the COVID-19 pandemic was no longer a core constraint on U.S. commerce.

A majority of 11 Fed officials penciled in at least two quarter-point rate hikes for 2023, adding in their statement that they would keep policy supportive for now to encourage a labor market recovery.

U.S. Treasury yields rose by the most since early March, while equities fell. Having on Wednesday clocked its biggest daily gain since March 2020, the dollar steady during Thursday’s Asian session and extended gains as European markets opened.

At 0720 GMT, the dollar index was up 0.2% on the day at 91.613, its highest in two months. The euro dropped versus the dollar, with euro-dollar changing hands at a two-month low of $1.1951.

“We think USD will hold on to its gains,” Elsa Lignos, global head of FX strategy at RBC Capital Markets, wrote in a note to clients. “In order to build on those gains, we need some further positive data surprises.”