Home›Forex›Major Pairs›Dollar Index extends gains as oil surge lifts Fed hike…

Dollar Index extends gains as oil surge lifts Fed hike bets

DXY was near 101.2 during Asian hours, while Treasury yields climbed above 5% after renewed expectations of further Federal Reserve rate increases.

Reported · Written up by our desk · Major Pairs

FXStreet reports the US Dollar Index, a gauge of the greenback versus six major currencies, extended gains for a second straight day and traded around 101.2 during Asian hours on Tuesday.

The outlet links the move to elevated oil prices tied to uncertainty in US-Iran negotiations, with Iranian officials expressing doubt about reaching an agreement ahead of the November US midterm elections, after the US rejected Tehran’s latest proposal.

FXStreet adds that the oil-driven pressure on energy costs has increased expectations that the Federal Reserve will need to tighten further to combat inflation, helping push Treasury yields to fresh multi-year highs, with both the 10-year and 30-year yields climbing above 5%.

According to the CME FedWatch Tool cited by FXStreet, money markets are pricing in roughly a 70% probability of another Fed rate increase in October after the central bank’s initial rate hike earlier this month.

Latest closeDollar index 101.25 ▲0.3%

More like this

Sources