Dollar firms near two-month peak as oil and US yields rise; jobs data looms
TLT•The dollar index rose to 101.27 and was on track for a 1.8% monthly gain as oil and US Treasury yields climbed. Traders awaited US inflation and payrolls data, while Australia raised its cash rate to 4.60%.
1. Dollar supported by yields
The dollar hovered near a two-month high on Tuesday, supported by rising oil prices and US Treasury yields, while traders awaited US data for clues to the Federal Reserve’s rate path. The dollar index was at 101.27 and on track to advance 1.8% for the month, its best performance since June.
2. Data and rate decisions
The 10-year US Treasury yield reached its highest level since 2007, while the 30-year yield hit its highest since 2004. The two-year yield rose to its highest in more than two years, nearing 5%. The PCE price index and nonfarm payrolls were due later in the week; markets saw a more than 70% chance of a Federal Reserve rate hike at the end of October, up from 57% a week earlier.
3. Currencies react
Brent crude rose above $107 a barrel as markets doubted efforts to end the Iran war. Australia’s central bank unanimously raised its cash rate to a 15-year high of 4.60%, and the Australian dollar briefly reached $0.7029 before paring gains. The yen weakened to 157.5 per dollar amid concerns about possible intervention.
