Dollar Hits Two-Week High Amid Energy Shock Concerns

The US dollar reached a two-week high on Wednesday as investors turned to the greenback amid concerns about the economic impact of the energy shock and diverging monetary policy paths across major economies.

The increase in oil prices benefits the dollar, which is less exposed to energy shocks than many other major economies. As a result, the dollar attracts demand at the expense of currencies like the euro and yen.

Most economists expect the European Central Bank to be near the end of its tightening cycle after next week's rate hike, while the Federal Reserve may need to tighten policy in 2027 due to growing risks. This could widen rate differentials in favor of the dollar and lead to a weaker euro.