Dollar Rises as Intensifying Iran War Lifts Rate Hike Bets

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessDollar Rises as Intensifying Iran War Lifts Rate Hike BetsThe dollar jumped Thursday as intensifying conflict in the Middle East sparked concerns over energy supply disruptions, fueling expectations that interest rates will stay higher for longer.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.A worker counts US dollar banknotes. Photo by Dimas Ardian /Bloomberg(Bloomberg) — The dollar jumped Thursday as intensifying conflict in the Middle East sparked concerns over energy supply disruptions, fueling expectations that interest rates will stay higher for longer. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe Bloomberg Dollar Spot Index rose 0.3%, poised for the best week in a month as oil prices topped $100 a barrel, increasing the likelihood of the Federal Reserve raising interest rates. Traders now fully price a rate hike in September, with some seeing the central bank increasing rates as early as next week.“Market seems to be supporting a higher-for-longer narrative,” said Andrew Hazlett, a foreign-exchange trader at Monex Inc. “Increasing escalations in the Middle East are also driving some haven support for the dollar.”Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe dollar jumped as surging oil prices reignited concerns over inflation. The Iran-backed Houthis claimed their first attack on commercial ships in recent months and President Donald Trump said he’ll hold Iran responsible for any further attacks. Yields on benchmark 10-year Treasuries hit a year-to-date peak.“With investors leaning back toward a higher-for-longer Fed outlook, interest-rate differentials are moving in the dollar’s favor,” said Nathan Thooft, a senior portfolio manager at Manulife Investment Management. “Geopolitical risk is likely exacerbating the move as well.”What Bloomberg Strategists Say…“While higher crude is once again feeding into higher yields and more hawkish rate expectations, markets are pricing markedly different policy responses across central banks. That suggests oil is setting the direction, but data and central banks are determining the magnitude.”— Skylar Montgomery Koning, macro strategist, Market Live. For the full analysis, click here.The dollar advanced against nearly all its major peers, with the New Zealand dollar underperforming. The Swiss franc fell to the lowest in over a year, while the yen has been at its weakest level in four decades, falling as low as 163.99 per US dollar on Thursday.Fed Chairman Kevin Warsh, who took the helm of the central bank in May, has broken with his predecessors’ practice of sharing guidance on the Fed’s likely path on rates, leaving the market divided about the July decision, pricing about a 35% chance that the Fed will raise rates by a quarter point. “Generally over the next three months, we remain bullish the dollar,” said Marcus Jennings, a strategist at Wells Fargo. “Given the repricing of the Fed, the risk of this tactical correction lower in the dollar is diminishing.”—With assistance from Carter Johnson.(Updates with more details throughout.)This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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