Dollar Rockets Amid Energy Shock Concerns

The U.S. dollar rose to a two-week high on Wednesday as investors sought safe-haven assets amid growing concerns about the economic impact of the energy shock.

The greenback tends to benefit from higher oil prices because the U.S. economy is less exposed to energy shocks than many other major economies, attracting demand at the expense of currencies such as the euro and yen.

Most economists expect the European Central Bank to be near the end of its tightening cycle after next week's widely anticipated rate hike, while the Federal Reserve is confronting a growing risk of having to tighten policy in 2027.

Schroders senior economist George Brown said that the ECB will likely finish its hiking cycle by the end of the year, while the Fed will be just beginning to raise rates.