Forex
Home›Forex›Major Pairs›Dollar firms on Red Sea tanker attack and higher oil p…
Dollar firms on Red Sea tanker attack and higher oil prices
The dollar index is up 0.4% as oil rises more than 5% and the 10-year Treasury yield climbs 5 basis points, with markets pricing a 36% chance of a 25-bp Fed hike next week.
The US dollar rose on Thursday as a Houthi attack on two Saudi oil tankers in the Red Sea raised concerns about disrupted crude shipments, while oil prices surged more than 5%, according to Yahoo Finance. The dollar index, DXY00, was up 0.4%, supported by stronger US interest rate differentials.
Treasury yields helped underpin the move, with the 10-year T-note yield up 5 basis points to a new 1.5-year high. The dollar also drew support from slightly stronger-than-expected US labor market data, with unemployment claims pointing to a firmer tone than markets had expected.
Safe-haven demand also factored in after the Iran-backed Houthis launched a missile and drone attack and vowed to blockade shipping linked to Saudi Arabia. The report noted the risk to Saudi crude exports from Yanbu, a Red Sea shipping hub, and referenced President Trump saying the US would take action if a Red Sea blockade occurs.
In currency pairs, EUR/USD fell 0.4% on dollar strength. USD/JPY rose 0.5%, with the yen moving to a 39-year low against the dollar, while the report said markets are pricing a 36% probability of a 25-bp rate hike at the next FOMC meeting on July 28 to 29.
Latest closeWTI crude $90.47 ▼1.9%|EUR/USD 1.137 ▼0.3%|USD/JPY 163.79 ▲0.4%