The dollar index held above 99 on Friday after rebounding in the previous session, as investors positioned themselves ahead of the latest US consumer price index release, which could reinforce expectations of a Federal Reserve rate hike next week. Data published on Thursday showed that US producer inflation accelerated last month, with the Iran war driving wholesale energy prices higher.
Futures markets now assign roughly a 71% probability to a 25-basis-point Fed rate increase next week, up from about 61% before the PPI data. Treasury yields also climbed after the US Treasury Department’s first expanded buyback operation resulted in lower-than-expected purchase volumes.
At the same time, oil prices surged above $100 a barrel as both the US and Iran showed little sign of de-escalating the conflict, heightening concerns about prolonged disruptions to global energy supplies and sustained inflationary pressures.
