Dollar Index Tests 101.6 Barrier as RBA Raises Rates to 4.60 Percent

The US dollar index has reached its strongest level since late July, nearing the 101.6 barrier as Treasury yields and Middle East tensions support the greenback.

Elevated US yields have raised the return on dollar assets, with the 30-year yield near 5.6 percent acting as a key backdrop for investors.

The Reserve Bank of Australia's decision to raise its cash rate by 25 basis points to 4.60 percent has not had a significant impact on the Australian dollar, which remains below 0.7000.

A hot August PCE print could push the dollar index through the 102.00 resistance area, tightening financial conditions for emerging markets and commodity currencies.