Dollar Firms as US-Iran Tensions Lift Oil Prices

The US dollar continued its upward trend on Monday, reaching near a two-month high as tensions between the US and Iran drove up oil prices and Treasury yields.

The dollar index, which measures the greenback against a basket of peers, was little changed at 101.14 but still set for a 1.7% gain this month, its biggest monthly gain since June.

Oil prices climbed more than 3% on Monday with Brent crude futures last above $107 a barrel after US President Donald Trump rejected a peace deal with Iran to resolve their conflict and reopen the Strait of Hormuz.

Energy supply risks and robust fundamentals in the US economy have heightened inflation concerns, prompting traders to price in a more hawkish Federal Reserve.