Dollar Gains Strength Ahead of ECB Rate Hike

The US dollar is gaining strength ahead of the European Central Bank's (ECB) interest rate hike, which is expected to be a near-certainty today.

The market has largely priced in a 25-basis-point increase in the ECB's deposit rate, taking it to 2.50%, and there is a strong probability (77%) of another hike in December.

However, concerns are growing about the stability of US interest rates due to rising oil prices and increased corporate debt issuance, which could jeopardize efforts to weaken the dollar.