Dollar Surges Amid Middle East Tensions and Crude Oil Price Hikes

The US Dollar rallied during the week ended July 24 due to renewed tensions in the Middle East and higher crude oil prices, which increased expectations of a Federal Reserve interest rate hike.

The six-currency Dollar Index jumped more than half a percent over the course of the week, reaching a high of 101.54 on Thursday from its low of 100.65 on Monday.

The surge in crude oil prices was attributed to disruptions in oil transit through the Strait of Hormuz and Red Sea, prompting markets to raise their expectations of a rate hike in September. According to the CME FedWatch tool, the likelihood of a Fed rate hike in September increased to 82 percent by July 24.