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Dollar climbs for fourth day as Middle East tensions lift oil

Oil prices rose after U.S. strikes on Iran and threats to disrupt Red Sea shipping, while markets recalibrated Fed hike odds.

Reported · Written up by our desk · Major Pairs

The U.S. dollar rose on Tuesday and was poised for a fourth straight session of gains, supported by higher oil prices tied to escalating Middle East tensions and renewed concerns about persistent inflation, according to Reuters. Reuters said two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea after threats from Yemen’s Iran-aligned Houthis, as the conflict disrupted shipping through key energy chokepoints. The U.S. military reported it finished its latest round of strikes on Iran on Monday, marking its 10th straight night of attacks.

U.S. crude rose 2.09% to $84.97 a barrel, while Brent climbed 1.88% to $90.90 per barrel after hitting $91.99 earlier in the day, its highest level since June 11, Reuters reported. The dollar index rose 0.17% to 101.16, and the euro fell 0.11% to $1.1402.

Reuters noted that expectations for a Fed rate hike moved higher in the wake of oil-driven inflation worries. CME FedWatch data cited by Reuters showed the odds of at least a 25 basis point hike for the next meeting at 21.9%, and a 68.2% chance of a hike for the September meeting.

Latest closeWTI crude $79.00 ▼0.8%|Brent $84.94 ▼0.0%|Dollar index 100.71 ▲0.2%

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