Dollar Rises for Fifth Day on Fed Rate Hike Bets
The U.S. dollar is on track for its largest weekly gain in two months as rising Treasury yields and inflation concerns drive expectations for potential Federal Reserve rate hikes. Markets are reacting to high oil prices and supply disruptions in the Strait of Hormuz caused by the ongoing Iran war.
The United States dollar rose for a fifth consecutive day on Friday as traders priced in a 48.4% chance of a December rate hike. The dollar index gained 0.29% to 99.23, marking its strongest weekly performance in two months, with the index up roughly 1.5% for the week. Investors are recalibrating portfolios as rising energy costs and geopolitical tension drive Treasury yields to one-year highs.
### Inflation Fears Drive Treasury Yields Higher The benchmark 10-year Treasury yield reached 4.581%, its highest in a year, after climbing 12 basis points on Friday afternoon. This surge followed economic data indicating persistent price pressures, exacerbated by the closure of the Strait of Hormuz. Comments from U.S. President Donald Trump and Iran's foreign minister further dented hopes of resolving the conflict that has disrupted global shipping lanes and forced a reset of inflation expectations.
