Dollar Soars Amid Middle East Tensions and Rate Hike Anticipation

The US dollar strengthened on Monday due to heightened tensions in the Middle East and anticipation of an imminent interest-rate hike by the Federal Reserve. The escalation of the conflict between the US, Israel, and Iran sent oil prices soaring, causing investors to flock to the safe-haven currency.

The US dollar index rose 0.3% to 99.41, its highest level since early September, as the euro dipped to a month-low of $1.153 and the British pound fell to $1.3512. The geopolitical turbulence also led to a surge in global bond yields, reaching unprecedented heights.

Brent crude prices touched $109.8 per barrel before stabilizing slightly. Diplomatic efforts to quell the conflict are faltering, exacerbating supply jitters and reinforcing the dollar's stronghold.