The dollar rose against most major currencies in Asian trading on Monday as Brent crude jumped 4.1% to USD 79.11 after renewed US-Iran attacks revived inflation and rate-hike concerns.
The US Dollar Index gained 0.1% to 101.13 after touching its highest level since July 8. The index measures the greenback against six major currencies.
The dollar advanced 0.2% against the Japanese yen to 162.075. The euro slipped 0.1% to USD 1.1397, while the British pound fell 0.2% to USD 1.3374.
The Australian dollar declined 0.3% to USD 0.6928. New Zealand’s dollar eased 0.1% to USD 0.5757.
Oil prices climbed after the United States and Iranian forces exchanged missile and drone attacks over the weekend. The fighting renewed concerns about shipping and energy supplies through the Strait of Hormuz. Brent later traded near USD 79.59, according to an Associated Press market update.
Read: Oil Prices Surge 5% as Global Markets Fall
IG market analyst Tony Sycamore said rising crude prices drove the dollar’s gains by heightening fears that energy costs could push inflation higher and bring forward interest-rate increases.
Federal funds futures priced a 50.9% probability of at least two Federal Reserve rate increases by the December meeting, up from 47.6% on Friday, according to CME FedWatch data cited in the report. CME says its FedWatch probabilities are derived from 30-day federal funds futures.
Capital Economics Asia-Pacific markets head Thomas Mathews said the dollar may gain less from the latest escalation because markets had already strengthened the currency and repriced the Federal Reserve outlook.
Bitcoin fell 2.1% to USD 62,790.02, while ether dropped 2.3% to USD 1,779.01.
