Dollar Surges Amid Middle East Tensions and Rising Oil Prices

The US dollar rose to its highest point in nearly two weeks on Wednesday as tensions in the Middle East led to higher oil prices and increased inflation concerns.

Oil prices surged, with Brent futures up 0.75% at $95.36 a barrel and U.S. West Texas Intermediate (WTI) crude 0.41% firmer at $90.62. The yield on the benchmark U.S. 10-year note rose to as high as 4.812%, its firmest since November 2023, before retreating to 4.804%.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.11% to 99.79. The euro was down 0.14% at $1.1576.

Analysts said rising Treasury yields and growing expectations of a Federal Reserve rate hike have driven investors towards safe-haven currencies like the US dollar. Markets are now pricing in a 68% chance of a September Fed hike, up from around 40% a week earlier.