Dollar Rallies on Hawkish Fed as Oil Prices Rebound

The US dollar has extended its gains this morning, despite oil prices finishing lower for the fifth consecutive day yesterday.

Oil prices have bounced back in this first half of today's session, causing some pressure on currencies that rely on energy imports like the euro, pound, Swiss franc, and Japanese yen.

However, it was the dollar that exerted the most pressure amid hawkish FedSpeak, with several officials warning that supply shocks, strong spending, and AI-related investment could keep inflation sticky.

The Fed's hawkish tone has led to growing expectations of further interest rate hikes in the US, widening the interest rate differential between the US and countries like Switzerland and Japan.