Dollar Surges to Seven-Week High Amid US Rate Hike

The US Federal Reserve's decision to raise interest rates has sent ripples across global markets. The rate hike, which was widely expected, saw the Fed increase borrowing costs by a quarter point.

This move has boosted the US dollar to a seven-week high against its major peers, with some analysts predicting further rate hikes in the near future. Goldman Sachs now expects the Fed to hike rates again in October, citing the need for a 'timelier return' to the 2% target.

The yield curve bear flattened as short-term maturities took a hit, but long bonds heaved a sigh of relief. The US Treasury yield curve has been inverted since July, with two-year yields holding steady at 4.71%. Meanwhile, the benchmark 10-year note yield hovered just below the key level of 5%, while 30-year bond yields eased to 5.33%.

The commodity markets took a hit, with Brent crude futures slipping 0.7% to $105.05 a barrel. However, gold showed some resilience, rising 1% to $4,305 an ounce.