Dollar Soars Amid Oil Tensions and Hawkish Rate Bets
The US dollar has reached a two-month high due to rising tensions between the United States and Iran, which is driving up oil prices. Brent crude topped $106 a barrel on Monday, with investors increasingly anticipating a more hawkish Federal Reserve.
Risks to energy supplies and resilient US economic data have heightened inflation concerns, leading investors to price in a more aggressive monetary tightening policy from the Fed.
The dollar index rose to 101.15, gaining 1.7% in September, its best monthly performance since June. The euro fell to $1.1379, while the British pound slipped to $1.3232, both losing 0.1% and remaining near multi-month lows against the dollar.
A busy week of US data is expected to influence inflation and interest rate expectations, with key releases including the personal consumption expenditures price index on Wednesday and nonfarm payrolls data on Friday.