Dollar Soars Amid Middle East Tensions and Fed Rate Hike Expectations

The US dollar gained across the board on Monday as tensions in the Middle East pushed up oil prices and drew investors to safe-haven currencies. The conflict in the region, including strikes by Houthi forces on Saudi Arabia's main pipeline, unnerved markets and sent global bond yields back towards multi-year highs.

The US dollar index rose almost 0.6% after touching a two-week high of 99.648, its highest since September 2. The euro fell to a one-month low against the dollar at $1.153 and was last down 0.5%, while the British pound dropped 0.5% to $1.3474.

Central banks are under pressure this week, with investors bracing for the Federal Reserve's first interest rate hike in over two years on Wednesday. A roughly 90% chance of a rate increase has been predicted by money markets, according to CME Group's FedWatch tool.