Dollar Strengthens Ahead of Fed and BOJ Rate Decisions
The US dollar strengthened on Monday as investors awaited key rate hike decisions from major central banks, including the Federal Reserve and Bank of Japan. The yen reached a seven-month high near 152.89 against the greenback due to expectations of faster rate hikes from the BOJ.
Oil prices surged nearly three percent to $107.6 per barrel after recent attacks on Saudi Arabia's oil facilities intensified supply concerns. Rising oil prices have contributed to inflationary pressures, which global policymakers are grappling with.
The Federal Reserve is set to announce its rate decision on Wednesday, and the Bank of Japan is expected to hike rates on Friday. The European Central Bank raised rates last week, warning of further hikes.
Traders now price in an 86% chance of a Fed rate hike this week, with another move higher later in the year. However, some strategists caution that waiting until December may be too long and could undermine Fed Chair Kevin Warsh's credibility on controlling inflation.