Dollar keeps climbing as oil, US yields stay high; jobs data looms
UUP•The dollar rose against major peers as high oil prices and rising U.S. Treasury yields supported expectations for Federal Reserve rate hikes. Investors awaited U.S. inflation and payrolls data this week.
1. Dollar gains broadly
The dollar tested several-month highs against major currencies as oil prices and Treasury yields stayed elevated. The euro fell as much as 0.32% to $1.13325, a three-month low, while the pound dropped 0.25% to $1.3221 and the Swiss franc weakened to 0.8335 per dollar.
2. Yields and forecasts
The U.S. two-year Treasury yield was near its highest level in two years and approaching 5%. Brent crude stood at $104.50 a barrel. Morgan Stanley said it now forecasts dollar strength through year-end and into 2027, and expects the euro to fall to $1.10 by mid-2027.
3. Data and rate decisions
Investors were watching the U.S. PCE price index due Wednesday and nonfarm payrolls due Friday for evidence on the outlook for Federal Reserve rates. Markets saw more than a 70% chance of a rate hike at the end of October. Australia's central bank raised its cash rate to 4.60%, but the Australian dollar fell 0.44% to $0.6988 after the governor said policymakers had considered holding rates as well as raising them.
