Dollar Rises Amid Middle East Tensions, Fed Rate Hike Looms

The US dollar strengthened on Monday as investors sought safe-haven assets due to rising oil prices and Middle East tensions.

Ongoing conflict in the region has pushed up oil prices, with Brent crude increasing by as much as 5% to $109.8 a barrel before paring gains to trade at $105.61.

The US dollar index rose 0.3% to 99.41, its highest since September 2, while the euro fell to a one-month low of $1.153 and was last down 0.2%.

Markets are increasingly convinced that the Federal Reserve will hike interest rates on Wednesday in response to rising energy prices and inflation, with money markets pointing to a roughly 90% chance of a rate hike, up from around 60% a week ago.