Dollar Index Hits Near-Highest Level on Energy Supply Fears and Sticky Inflation

The U.S. dollar index held near its highest level of the past week at 99.081, according to Univest, after gaining 0.3% in the previous session. This marks one of the stronger weekly performances for the dollar index in recent sessions, reflecting increased safe-haven demand for the U.S. currency.

The yen slipped for a second consecutive day as renewed fears of energy supply disruption in the Middle East pushed both bond yields and oil prices higher. Japan's reliance on energy imports makes its currency vulnerable when oil prices spike, widening the country's trade deficit.

U.S. producer price data released in August showed a 0.4% increase, meeting market expectations. The rebound in energy costs reinforced concerns about sticky inflation, which tends to support the dollar index as rate-cut expectations are pared back.