Dollar holds firm at nearly two-week high as Middle East hostilities lift oil
The U.S. dollar strengthened near a two-week high on Wednesday after tensions in the Middle East pushed oil prices upward, reigniting inflation worries and putting upward pressure on bond yields. The dollar index climbed to 99.79, its highest since August 17, while the euro fell to $1.1577. Investors view the dollar as a safe-haven currency amid rising Treasury yields and expectations of a Federal Reserve rate hike.
Earlier this week, the U.S. conducted airstrikes in Iran, leading to Iranian retaliation in the most serious escalation in weeks. Oil prices rose, with Brent futures up 1.15% to $95.74 a barrel and WTI crude 0.85% higher at $91.05. Analysts note that the situation in the Middle East remains a concern, while U.S. economic data released this week came in below forecasts.
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