Dollar Hits One-Month High as Rate Hike Chances Rise

The US dollar held at a one-month high on Tuesday, despite falling oil prices easing inflation concerns. The dollar index rose by 0.03% to 101.55, with the euro down 0.01% at $1.1366.

Traders are weighing a slim but lingering chance of a rate hike at the Federal Reserve's upcoming meeting, which is expected to end on Wednesday. A growing number of major brokerages believe there is a real risk of the Fed delivering a rate hike this week, given the surge in oil prices during the month and the escalation in tensions in the Middle East.

Expectations for a rate hike of at least 25 basis points from the Fed at its policy announcement are pegged at 36.3%, according to CME FedWatch, up from 16% a week ago. Markets are pricing in an 81% chance for a hike at the central bank's September meeting.