DXY Soars to Three-Week High on Revived Fed Hike Expectations

The US Dollar Index (DXY) has continued to hold its gains in the Asian session on Friday, reaching an over three-week high of 101.50 as rising oil prices have revived expectations for a Federal Reserve interest rate hike.

The surge in oil prices is driven by intensified Middle East energy supply risks, with the closure of the Bab el-Mandeb Strait and the Strait of Hormuz disrupting 27% of global energy supply.

FedWatch tool data shows that the odds of a Fed interest rate hike in next week's policy meeting have increased to 35.8%, significantly higher than last week's 11.8%. This has boosted the US Dollar, with its value against six major currencies holding steady.