U.S. inflation figures and Fed Chair Warsh’s testimony drive dollar strength amid rising oil prices and geopolitical tensions.
The dollar traded close to 13-month highs ahead of key U.S. inflation data, with investors weighing the impact of Middle East tensions and Federal Reserve policy signals. Oil prices neared $90 a barrel as maritime traffic through the Strait of Hormuz stalled, raising concerns over global price pressures.
Markets are pricing a 20% chance of a Fed rate hike in July, pushing U.S. Treasury yields above 4.6%, their highest since May. Fed Chair Kevin Warsh’s semiannual testimony to Congress is expected to focus on inflation risks, though he has avoided offering clear policy guidance.
Traders remain cautious as geopolitical risks and inflation expectations shape the dollar’s outlook. Warsh’s recent remarks suggested the Fed would not ease its stance on inflation, reinforcing the dollar’s resilience.