Oil Prices Fuel USD Rally as Hawkish Fed Bets Trimmed
The US Dollar Index (DXY) continues to rise due to increasing oil prices, which have prolonged fears of energy supply disruption and kept global inflation expectations anchored.
As a result, the DXY has reached near 99.90 at press time, with investors shifting their focus to the upcoming US Consumer Price Index (CPI) data release on Wednesday.
The latest US labor market data for July revealed a reduction in the overall labor force and downward revisions in labor additions figures of previous months, leading strategists at ING to argue that the Federal Reserve's interest rate hike is unlikely.
According to the CME FedWatch tool, the odds of the Fed leaving interest rates unchanged in the September meeting are 48.3%, up from 30.4% seen a month ago.