Dollar Gains Amid Middle East Energy Shock
The US dollar continued to hold its gains on Friday as tensions in the Middle East heightened energy supply fears, causing oil prices and bond yields to rise. According to Reuters, the U.S. dollar index was trading flat at 99.084 after strengthening to its highest level since September 7.
Market analyst Tony Sycamore said the safe-haven US dollar gained on risk-aversion flows, helped by higher energy prices that have lifted the chance of a Fed hike next week to 70%. Energy prices snapped a five-day gaining streak, with Brent crude futures down 0.6% at $106.99 a barrel in Asian trade.
The yen slipped despite stronger wholesale inflation in Japan, while currencies like the kiwi and aussie showed modest rebounds amid heightened global volatility. The market is awaiting the release of US CPI later on Friday, one of the last major economic data points released before the Federal Reserve meets next week.