Dollar Shines as Oil Prices Surge Amid Global Bond Market Pressure

The US dollar is gaining strength as oil prices surge and global bond markets come under pressure. The renewed energy shock, combined with softer risk sentiment and another run of strong US data, has reinforced the dollar's relative appeal.

Brent crude prices have risen by over 2% after attacks forced Saudi Arabia to shut a major pipeline, further adding to inflation concerns. Meanwhile, global yields are pushing to fresh multi-decade highs, keeping bond markets under pressure.

As energy prices continue to rise and risk sentiment deteriorates, the dollar's safe-haven appeal is being restored. Strong jobs data and hotter August inflation have forced a sharp hawkish repricing of Fed expectations, strengthening the case for a 25bp hike this week.