Dollar Hits Near Two-Month High Amid Ongoing US-Iran Tensions
The US dollar continued its upward trend on September 28, reaching near a two-month high as tensions between the US and Iran pushed up oil prices. The dollar index, which measures the greenback against a basket of peers, was little changed at 101.16, but was set for a 1.7 per cent monthly gain.
The euro and sterling remained under pressure, with the euro hovering near a two-month low against the US currency at $1.1370 and sterling close to a three-month low of $1.3204 hit last week.
The increase in oil prices was seen as a key factor driving up the dollar, with Brent crude futures trading above $108 a barrel after US President Donald Trump rejected a peace deal with Iran.
According to Roberto Cobo, head of Group of 10 FX strategy at BBVA, 'The rise in oil prices is dollar-positive mainly through the inflation and Fed channel.' The market focus will shift to upcoming US data releases, including the personal consumption expenditures price index on Wednesday and non-farm payrolls on Friday.