Dollar Soars to Near Two-Week High as Oil Prices Surge
The US dollar has reached near two-week highs as oil prices surge to $107 a barrel, driving up Treasury yields and solidifying expectations of an interest rate hike by the Federal Reserve this week.
According to CME's FedWatch tool, there is now a roughly 93% chance of a rate increase on Wednesday, which would be the first in more than three years. Analysts at OCBC note that higher oil prices, combined with increased U.S. yields and weaker risk appetite, have helped lift the dollar broadly.
Christopher Wong, FX analyst at OCBC, stated that near-term support may persist, but further dollar upside will likely require the Fed to keep the door open to additional tightening. The dollar index is currently trading at 99.55, with the euro and sterling slightly weaker against the greenback.