Dollar Rises as Fed Hike Bets Surge

The US dollar has gained strength in recent days due to increased speculation of a Federal Reserve rate hike. The Fed funds futures now price in about a 33% chance of a hike, up from around 10% on July 16. As a result, the greenback is trading with a clear firmer bias and has made new highs for the month against several currencies, including the euro and sterling.

Oil prices have also contributed to the dollar's gain, falling to a six-day low before the weekend and continuing to decline on Monday. This has put pressure on major bond markets and weighed on equities in the tech sector, which had already been hit with profit-taking.

The South Korean stock market fell nearly 11% today, while Taiwan's Taiex slumped over 4.5%. The dollar is poised to gap lower against the peso after reports of continued intervention by the Reserve Bank of India led to a decline in the currency.