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Oil near USD110 lifts yields and supports the US dollar

FXStreet highlights that MUFG links the rise in oil prices to disappointment over limited progress on a US-Iran deal to reopen the Strait of Hormuz and renewed risk from attacks near Riyadh.

Reported · Written up by our desk · Major Pairs

FXStreet points to MUFG commentary saying oil is one of the biggest drivers in markets, with prices rising back toward recent highs around USD110 per barrel.

According to MUFG, the rebound reflects disappointment over limited progress on a US-Iran deal to reopen the Strait of Hormuz, and geopolitical tensions including attacks near Riyadh, which help sustain higher energy prices.

FXStreet adds that the oil move is feeding into higher yields and global bond market sell-offs, while also supporting the US dollar as safe-haven demand increases.

In the same market snapshot, FXStreet notes AUD/USD holding around 0.7000 at the start of the week, with US yields near multi-year highs amid inflation risks from higher oil prices and expectations for a possible October Fed rate hike.

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