US Dollar Rally Explained | Energy Shock, ISM Data and Fed Rate Cuts

Описание: The US dollar moved sharply higher as oil prices surged and energy markets repriced amid escalating Middle East tensions.

In this Macro Meets Markets update, I break down the key drivers behind the dollar rally:

• The widening Brent–WTI spread
• The surge in European gas premiums
• Stronger-than-expected ISM manufacturing data
• A jump in the prices paid component to 70.5
• Firmer US Treasury yields
• Fed rate cut expectations pared back
• A bullish breakout in the Dollar Index (DXY)

Importantly, this wasn’t just an inflation scare. The data also pointed to economic resilience, which helped support yields and the US dollar.

With ISM services, ADP and nonfarm payrolls ahead, incoming US labour market data may now determine whether the dollar’s energy-driven advantage holds.