U.S. Dollar Index Hits 101.49, Up 0.7% for Best Weekly Performance Since Mid-June

On Friday (July 24), the U.S. Dollar Index (DXY) hit 101.49, rising 0.7% for the week—the best weekly performance since June 19. The dollar rally was driven by escalating Middle East tensions boosting safe-haven demand, alongside market expectations of potential Federal Reserve rate hikes to combat inflation pressures.

Brent crude surged past $100 per barrel for the first time since May, with a projected two-week gain exceeding 25%, after Houthi forces backed by Iran attacked Saudi oil tankers in the Red Sea. Market expectations for Fed rate increases have also risen, with CME FedWatch data showing a 38% probability of a 25-basis-point rate hike at next week's policy meeting, up from 13% a week prior.