Dollar Index Hits Two-Month High Amid Rising Yields and Volatile Oil Prices

The dollar index has reached its highest level in two months, standing at 101.2. This marks a significant gain of 1.8% for the month of September, which is the best performance since June.

The euro is trading near its weakest value in three months, valued at $1.1367 against the dollar. The sterling is steady at $1.3248, also near a three-month low.

Oil prices have increased to around $106 per barrel, while Treasury yields have risen to their highest levels since 2004 and 2007 respectively for the 30-year and 10-year benchmarks. However, the dollar's gains are limited due to investors awaiting US data releases later in the week.

Joseph Capurso, head of foreign exchange at the Commonwealth Bank of Australia, stated that 'We're more likely to get stronger US economic data which shows that the US economy is exceptional, and I think that's going to help to push up US interest rates compared to elsewhere, and help push up the US dollar.'

The Federal Reserve's rate path remains a major concern for traders, with a 70% chance of a rate hike by October. The Reserve Bank of Australia is expected to raise its key rate later on Tuesday.