Risk aversion drives the dollar to its largest increase in nearly a year, while energy prices soar
According to Jinshi, driven by inflation concerns and safe-haven demand due to the escalation of the Iran war, the dollar has recorded its largest two-day gain in nearly a year. As traders lowered their expectations for interest rate cuts, the 10-year U.S. Treasury yield rose by 7 basis points, reaching a three-week high. Oil prices surged above $85 per barrel for the first time since July 2024, while European gas prices skyrocketed by 40%, hitting the highest level since 2023. Traders are cutting back on expectations for the Federal Reserve's easing policy before the end of the year, with the money market currently pricing in a 37 basis point rate cut by the Fed this year.
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