Dollar Index Rises as Oil Prices Soar and Hawkish Comments from US Central Banker
The US dollar index DXY rose by +0.29% on Monday amid higher T-note yields, which strengthened the dollar's interest rate differentials.
WTI crude oil prices surged by +5%, raising inflation expectations and potentially persuading the Federal Reserve to tighten monetary policy, a supportive factor for the dollar.
Cleveland Fed President Beth Hammack made hawkish comments on Monday, saying she sees no problem with the job market and that inflation is not coming down on its own.
She added that 'now is the time' for action, as the current interest rate is not meaningfully restricting the economy, and they would probably need 'some number' of rate hikes to bring down inflation.
The risk of a renewed flare-up in the Middle East remains high, providing safe-haven demand for the dollar.