Dollar Strengthens Further
The dollar index extended its gains for a fourth consecutive session, rising to 101.2 on Thursday, its longest winning streak since May and keeping it near July highs. The dollar has been supported by expectations of further Fed tightening. Oil prices also moved higher amid elevated tensions between the US and Iran, while talks on the sidelines of the UN General Assembly have made little progress toward ending the conflict. Higher energy prices are likely to add further pressure on inflation, particularly as US diesel prices hit a new record high. Against this backdrop, traders have increased their bets on further Fed tightening this year. Markets are now pricing in nearly a 64% chance of another 25 bps rate hike in October. Recent comments from several Fed officials have also been perceived as hawkish. Meanwhile, the dollar strengthened against the Swiss franc after the Swiss National Bank left interest rates unchanged at 0%. The Japanese yen also weakened to three-week lows.
2 on Thursday, its longest winning streak since May and keeping it near July highs. The dollar has been supported by expectations of further Fed tightening. Oil prices also moved higher amid elevated tensions between the US and Iran, while talks on the sidelines of the UN General Assembly have made little progress toward ending the conflict. Higher energy prices are likely to add further pressure on inflation, particularly as US diesel prices hit a new record high.
Against this backdrop, traders have increased their bets on further Fed tightening this year. Markets are now pricing in nearly a 64% chance of another 25 bps rate hike in October. Recent comments from several Fed officials have also been perceived as hawkish. Meanwhile, the dollar strengthened against the Swiss franc after the Swiss National Bank left interest rates unchanged at 0%.
The Japanese yen also weakened to three-week lows.