20 hrs ago

Dollar rises as oil boosts yields before expected Fed hike

Dollar rises as oil boosts yields before expected Fed hike
Dollar higher as oil lifts yields and Fed hike looms · livemint.com

The U.S. dollar became a little stronger against several other currencies.

Oil prices stayed very high, which raised worries about inflation.

Those worries pushed U.S. government bond yields higher.

The 10-year yield reached its highest level since 2007.

Investors think the Federal Reserve will probably raise interest rates on Wednesday.

However, traders are also listening closely to what officials say about future rate increases.

The euro, pound, and yen all weakened against the dollar.

The yen briefly fell past 155 yen for one dollar.

Markets were also affected by attacks in the Gulf region and falling stock prices.

Key facts

Dollar index
Rose 0.15% to 99.631, near a roughly two-week high.
U.S. 10-year yield
Reached 5.041%, its highest level since 2007, and was later just below 5.004%.
Federal Reserve hike probability
Markets priced a 95% chance of an interest-rate increase on Wednesday.
Oil price
Remained above $105 a barrel, near a four-month high.
Euro
Fell 0.1% to $1.1541.
Sterling
Fell 0.2% to $1.3477.
Yen
Weakened 0.5% against the dollar and briefly moved past 155 per dollar.

Quotes

Juan Perez

Senior director of trading at Monex USA in Washington

“What tone are you giving us? ... Can we then think about December, think about the remainder of the year ... that's really what's going to affect the direction of the currency”
livemint.com
“You have to be prepared for the unexpected ... this is a time of volatility”
livemint.com

Gabriele Foà

Portfolio manager at Algebris Investments

“If the Fed is viewed as beginning a new hiking cycle rather than calibrating monetary policy, monetary policy could have spillovers to risk assets”
livemint.com

Sources

Related news