Dollar Soars Amid Escalating Middle East Tensions
The US dollar has maintained its strength, rising to nearly a two-week high of 99.79 as tensions in the Middle East escalated, driving up oil prices and inflation concerns.
Renewed hostilities between the US and Iran led to a surge in oil prices, with Brent futures increasing by 1.15% to $95.74 a barrel and U.S. West Texas Intermediate (WTI) crude rising 0.85% to $91.05.
The dollar's appeal as a safe-haven asset has been reinforced by growing expectations of a Federal Reserve rate hike, despite recent economic data coming in below forecasts.
Fed Governor Michael Barr stated that if inflation does not cool quickly, it will be time for the central bank to raise interest rates, further solidifying market expectations of a September Fed hike, now priced at 68% according to CME Group's FedWatch tool.