US Dollar Hits Six Week High on Inflation Fears
The U.S. dollar climbed to a six-week peak against the euro as investors weighed potential Federal Reserve rate hikes to combat energy-driven inflation. Market sentiment was further impacted by geopolitical tensions with Iran and rising Treasury yields, while the Japanese yen remained near intervention levels.
The United States dollar rose 0.34% to 99.30 on May 19 as investors weighed hawkish Federal Reserve expectations against Middle East instability. The dollar index reached a six-week high against the euro during the Tuesday session. Rising energy-driven inflation and geopolitical uncertainty are fueling safe-haven demand for the greenback.
### Inflation Fears Drive Treasury Selloff A selloff in Treasuries pushed 30-year bond yields to their highest levels since 2007 on Tuesday afternoon. Investors are focused on how Federal Reserve Chair Kevin Warsh will manage accelerating price pressures. Fed funds futures now price in 50% odds of a rate hike by December, although many analysts said a rate increase is unlikely unless inflation appears in core consumer prices and inflation expectations break higher.
