The rally in the U.S. dollar on the notion that U.S. interest rates could rise sooner rather than later may just be getting started, analysts say.
The dollar soared more than 1 percent against the yen and almost 1 percent versus the euro on Wednesday after new Federal Reserve Chair Janet Yellen said interest rates could start to rise six months after the scaling back of monetary stimulus ends.
(Read more: Yellen indicates rate hike sooner than expected)
Ray Attrill, co-head of currency strategy at National Australia Bank said that as long as upcoming U.S. economic data confirms the Fed's confidence that recent weakness in data is related to unusually cold weather, the dollar should head higher.
"They [Fed policymakers] have not downgraded growth forecasts for this year or next and the fact they haven't done that is one reason why they are hawkish," he said.
"If data disappoints that could trigger the dollar to unwind some of the gains, but we think the data will start to improve and therefore that means the dollar gains should be built on," Attrill added.