Dollar Rises Amid Oil Price Surge and Inflation Fears
The US dollar has reached its highest point in nearly two weeks due to rising oil prices and inflation concerns. The dollar index, which measures the greenback against a basket of currencies including the yen and euro, rose 0.11 per cent to 99.79 on Wednesday.
Renewed hostilities in the Middle East have driven oil prices higher, with Brent futures up 1.15 per cent at $95.74 a barrel and U.S. West Texas Intermediate (WTI) crude 0.85 per cent firmer at $91.05. This has added upward pressure on bond yields.
The euro was down 0.13 per cent at $1.1577, while the British pound lost 0.09 per cent to $1.3503. The New Zealand dollar weakened 0.8 per cent against the greenback to $0.5844, its lowest point since August 13.
Analysts say that market participants viewed the recent rate hike by the Reserve Bank of New Zealand as less hawkish than expected. However, expectations of a Federal Reserve rate hike have increased, with markets now pricing in a 68 per cent chance of a September Fed hike, up from around 40 per cent a week earlier.