Dollar Soars as Oil Prices Jump Above $100
The US dollar continues its advance against major global currencies, including the euro, despite the European Central Bank's (ECB) hawkish rhetoric. The ECB left its deposit rate at 2.25%, but noted that several Governing Council members considered acting again now.
The EURUSD is influenced more by the Fed's actions than the ECB's, as the Federal Reserve has room for manoeuvre with a deposit rate 150 basis points above the ECB's. The futures market prices in two rounds of monetary tightening in 2026, with the first expected in September or October.
The rising oil prices above $100 per barrel increase the chances of a Fed rate hike as early as July, with a 34% probability according to CME derivatives. Meanwhile, the White House has introduced new tariffs on several dozen countries, which have had little impact on the markets.