Dollar Soars on High Oil Prices and Rising Yields

The US dollar continues to strengthen against major peers, reaching several-month highs as volatile oil prices and rising Treasury yields underpin its value. The greenback's upward trend is driven by the global energy shock and growing political risk in Europe.

Elevated oil prices have sent Treasury yields higher across the curve, with the two-year yield nearing 5%. This has led markets to price in meaningful rate hikes by the Federal Reserve, further supporting the dollar's climb. Brent crude futures currently stand at $104.5 a barrel, still at painful levels for many energy-intensive industries.

Australia's central bank raised its cash rate to a 15-year high of 4.60% today in a unanimous decision, citing inflation as too high and prepared to hike further if needed. However, the Australian dollar struggled after the decision, plummeting to its lowest level in nearly two months.