Dollar Soars as Oil Prices Jump and AI Fears Weigh on Markets

The US dollar rallied to a two-week high on September 14 as tensions in the Middle East pushed up oil prices and sent investors seeking safe-haven assets. Brent crude jumped 3% to $108 a barrel after Houthi strikes on Saudi Arabia, which is the world's largest oil exporter. The attack came after Riyadh shut down its main pipeline for bypassing the Strait of Hormuz.

Additionally, warnings from CEOs about the dangers of artificial intelligence (AI) weighed on stocks and boosted the dollar. Rising bets on a Federal Reserve rate hike on Wednesday also supported the US currency. According to CME Group's FedWatch tool, money markets now point to a roughly 90% chance of a rate increase, up from around 60% a week ago.

The euro fell to a one-month low of $1.153 and was last down 0.4%, while the British pound dropped 0.3% to $1.35. The Japanese yen also gave up some of its recent gains, with the dollar rising 0.7% against Japan's currency to 154.55 yen.