The dollar index strengthened on Wednesday to surpass 102.4 points, reaching its highest level since March 2025, in a context marked by rising oil prices and renewed inflation concerns in the United States.
This development fuels expectations that the U.S. Federal Reserve could be forced to maintain a restrictive monetary policy for an extended period.
Oil prices rekindle inflation fears
The recent rise in oil prices has reinforced concerns about a potential persistence of inflationary pressures.
Investors are once again considering the possibility that the U.S. Federal Reserve (Fed) may need to keep its interest rates elevated for longer in order to contain inflation.
Last month, the U.S. central bank raised its main policy rate by 25 basis points, its first increase in the cost of credit since 2023.
Markets await the Fed minutes
Investors are also awaiting the release, later on Wednesday, of the minutes of the latest meeting of the Federal Open Market Committee (FOMC).
This document will be closely watched for further indications on the Fed’s monetary policy outlook and on how its officials assess the risks related to inflation and to economic activity.
According to market expectations cited, the probability that the central bank will keep rates unchanged this month is around 78%.
By contrast, the probability of another 25-basis-point increase in December is around 69%.
The dollar advances notably against the euro
The greenback has strengthened against several major currencies, notably recording its strongest rise against the euro.
The euro has been weighed down by political and budgetary concerns surrounding Spain and France, contributing to the dollar’s relative strength on the foreign exchange market.
The trajectory of the dollar now remains closely linked to upcoming indications from the Fed, inflation data and the trajectory of energy prices.
