Dollar Surges on Hawkish Fed Remarks Despite Oil Price Rebound
The US dollar has strengthened further today, despite oil prices rebounding in the first half of the day. This rebound had briefly put pressure on currencies that rely heavily on energy imports, such as the euro and yen. However, the dollar's gains have been driven by hawkish FedSpeak from officials including Austan Goolsbee and Thomas Barkin.
The recent decline in oil prices had initially improved risk appetite, but this has now started to roll over. The PMI data released today showed firmer numbers, but Donald Trump's speech at the UN suggesting a possible deal with Iran after the election has cast doubt on any imminent agreement.
This has led to a strengthening of the US dollar, which is expected to remain supported in the short term. The interest rate differential between the US and other countries, including Japan and the eurozone, is likely to widen further.