Dollar Gains as Euro Comes Under Pressure
The dollar index rose toward 102 on Monday, benefiting mainly from the euro’s weakness following violent protests in France and other European countries and escalating hostilities between Russia and Ukraine. Investors also kept a close watch on developments in the Middle East, where clashes between Saudi Arabia and Iran-backed Houthi rebels in Yemen showed little sign of easing and tanker attacks in the Strait of Hormuz continued. Meanwhile, the dollar weakened on Friday after Federal Reserve Chair Kevin Warsh refrained from signaling the outcome of this month’s FOMC meeting but said that hotter-than-expected inflation had not altered his assessment of the US economy. The Fed has since entered its blackout period ahead of the October 27—28 policy meeting, with markets currently pricing in an approximately 84% chance of interest rates remaining unchanged.
The dollar index rose toward 102 on Monday, benefiting mainly from the euro’s weakness following violent protests in France and other European countries and escalating hostilities between Russia and Ukraine. Investors also kept a close watch on developments in the Middle East, where clashes between Saudi Arabia and Iran-backed Houthi rebels in Yemen showed little sign of easing and tanker attacks in the Strait of Hormuz continued. Meanwhile, the dollar weakened on Friday after Federal Reserve Chair Kevin Warsh refrained from signaling the outcome of this month’s FOMC meeting but said that hotter-than-expected inflation had not altered his assessment of the US economy.
The Fed has since entered its blackout period ahead of the October 27—28 policy meeting, with markets currently pricing in an approximately 84% chance of interest rates remaining unchanged.