Dollar Dominance Continues as Oil Prices Send Mixed Signals

The US dollar had a dominant performance in September, as the Federal Reserve raised interest rates to 3.75-4.00%, causing U.S. Treasury yields to reach decades-high levels.

High oil prices due to the Iran conflict also played a significant role, with Brent crude staying above $100 per barrel for most of the month. The dollar index (DXY) rose by just over 2% in September on hawkish Fed expectations and safe-haven flows.

The Mexican peso weakened by about 6% against the US dollar, while the Russian ruble strengthened by around 3.5%. This was largely due to Russia's energy exports remaining a significant revenue source, despite the ongoing blockade in the Strait of Hormuz.