Dollar Climbs to Over Three-Month High as Rising Oil Prices Heighten Inflation Concerns

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The dollar rose to its highest level in more than three months, gaining against all other G-10 currencies, as rising oil prices intensified inflation worries.

The Bloomberg Dollar Spot Index advanced 0.1% to its highest since June 25. The U.S. Treasury cash market was closed for Columbus Day.

Brent crude briefly surpassed $107 per barrel after Ukraine cast doubt on the Russia-Ukraine "energy ceasefire" claimed by Trump.

Traders are awaiting inflation data to gauge the outlook for Federal Reserve policy.

"The market will react to a hawkish surprise, but one CPI reading may not be enough to reverse the pause expectations that senior Fed officials appear intent on establishing," said Daragh Maher, senior FX strategist at HSBC, in a report. "If CPI comes in only slightly above expectations, it could further boost confidence in holding steady in October and a rate hike in December, without materially changing the dollar trend."

EUR/USD fell 0.4% to 1.1158, after declining for five consecutive weeks. French debt concerns weighed on the euro, while the AI investment boom is driving global bond yields higher.

GBP/USD dropped 0.2% to 1.3205.

USD/CHF rose 0.5% to 0.8345, extending its seven-week upward momentum.

USD/JPY gained 0.2% to 158.66.

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