Dollar keeps climbing as oil, US yields stay high; jobs data looms

The U.S. dollar continued its climb on Tuesday, nearing several-month highs against major currencies, as soaring oil prices and high Treasury yields bolstered the greenback. The Australian dollar struggled, falling to three-month lows amid expectations of a rate hike from the Reserve Bank of Australia. Meanwhile, the euro dropped to a three-month low as traders saw a potential dovish message hidden within a rate hike.

Markets now anticipate a more than 70% chance of a Federal Reserve rate hike by the end of October, up from 57% a week ago, with the dollar expected to strengthen through year-end and into 2027.