The dollar index inched up to 100.3 on Monday, its highest level in nearly three months, extending last week’s gain of almost 1.1%. The greenback continued to draw support from the Federal Reserve’s more hawkish stance. The Fed raised the federal funds rate by 25 basis points last week and is expected to implement another increase before year-end.
Chicago Fed President Austan Goolsbee said he remains open to the prospect that inflation will resume its decline toward the 2% target, but cautioned that interest rates may need to rise further if that does not occur. Meanwhile, Minneapolis Fed President Neel Kashkari noted that inflation remains uncomfortably high across all sectors of the economy, rather than being driven solely by oil prices.
Oil prices, however, fell for a fourth consecutive session amid optimism that diplomatic efforts could help resolve the conflict with Iran. The dollar was broadly stronger against the yen, the euro, and the pound.
