Dollar Surges Amid Escalating Tensions and Tariffs

The US dollar saw significant gains last week, rising by 0.7% against its major peers.

This came as tensions in the Middle East escalated, driving up oil prices by 5%, and President Trump's decision to apply new tariffs added to inflation concerns.

Despite a slight easing of inflation data in June, with US CPI down more than expected, these factors have reignited fears of rising inflation ahead of this week's FOMC meeting.

The market is now pricing in a 35% probability that the Fed will hike rates this week, up from just 12% ten days ago, and an 80% chance by September.