Dollar Strengthens on Oil Price Surge as Rate Hike Odds Decline
The US dollar strengthened on Monday as oil prices increased ahead of this week's key inflation data releases, which could influence the Federal Reserve's decision to hike interest rates. Analysts say slowing job growth and easing oil prices have contributed to lower odds of a near-term rate hike.
According to Fed funds futures traders, there is now a 52% chance of a rate hike at the September meeting, down from 67% last week. This decrease in probability was attributed to the weaker-than-expected jobs report on Friday and poor revisions to previous data.
Adam Button, chief currency analyst at investingLive, stated that 'September was starting to look highly likely and then not only did we get a bad jobs report, but terrible revisions as well.'
The Japanese yen weakened 0.84% to 159.14 per dollar, its steepest daily decline against the greenback in almost five months.