FX.co ★ Dollar Gains as Euro Comes Under Pressure

The US dollar index climbed toward 102 on Monday, supported largely by euro weakness amid violent protests in France and other European countries, as well as intensifying hostilities between Russia and Ukraine. Markets also monitored tensions in the Middle East, where fighting between Saudi Arabia and Iran-backed Houthi rebels in Yemen showed little sign of abating, and tanker attacks in the Strait of Hormuz persisted.

On Friday, however, the dollar softened after Federal Reserve Chair Kevin Warsh declined to signal the likely outcome of this month’s FOMC meeting, noting that stronger-than-expected inflation data had not changed his overall assessment of the US economy. The Fed has since entered its blackout period ahead of the October 27–28 policy meeting, with futures markets currently assigning roughly an 84% probability that interest rates will be left unchanged.