Dollar index rises to 99 as oil rally lifts Fed hike odds
The dollar index rose to 99 on Thursday. Oil prices rallied amid escalating US-Iran hostilities, pushing investors to price a 70% chance of a 25bps Fed rate increase next week (up from 60%).
The dollar index climbed to 99 on Thursday as another rise in oil prices, amid escalating hostilities between the US and Iran, led investors to boost bets on a Fed rate increase next week. Markets are pricing a 70% chance of a 25bps move, up from 60% yesterday, with an October hike fully priced in. The PPI report had little impact on expectations. 3%.
Friday's CPI report will be closely watched for clues on price pressures. The ECB also raised borrowing costs by 25bps as expected and lifted its inflation forecasts.