Dollar Extends Rebound Amid Hawkish Fed Bets and Rising Inflation

The US Dollar Index (DXY) has continued its upward momentum, reaching above 99.6, a significant rebound from its three-month low of 98.8 on August 21st.

This surge is closely tied to the increase in yields across the curve, which reflects growing concerns about inflationary pressures.

The Federal Reserve's more hawkish stance on interest rates has been a major driver of this trend, as policymakers like Chairman Warsh have warned that inflation could justify rate hikes.

Additionally, recent attacks between the US and Iran have contributed to volatility in energy prices, further fueling inflationary pressures.