Dollar climbs for fifth straight day as Fed rate hike bets grow

By Chuck Mikolajczak

NEW YORK, May 15 (Reuters) - The dollar gained for a 5th consecutive time connected Friday and was poised for its largest play percent emergence successful 2 months, arsenic marketplace expectations for the way of monetary argumentation from the Federal Reserve proceed to displacement towards imaginable ‌rate hikes.

The beforehand successful the greenback this week comes arsenic U.S. Treasury yields proceed to ascend, with the benchmark 10-year Treasury enactment reaching 4.581%, ‌its highest successful a year, aft a raft of economical information earlier this week pointed to rising terms pressures with the Strait of Hormuz mostly shuttered owed to the Iran war.

The dollar index, which measures ​the greenback against a handbasket of currencies, roseate 0.29% to 99.23, with the euro down 0.35% astatine $1.1627 aft hitting a five-week debased of 1.1617.

"It's looking to maine that the enslaved market's starring the complaint connected this one, arsenic they often do, that they're starting to get disquieted astir inflation," said Joseph Trevisani, elder expert astatine FXStreet successful New York.

"If you're going to get an lipid terms successful WTI from 95 to 105, past a batch of ostentation expectations person to beryllium reset, and successful fact, they're resetting. Well, if ‌they're resetting, the enslaved market's going to bash precisely ⁠the aforesaid thing, and that's what the enslaved marketplace is doing."

West Texas Intermediate crude roseate 3.07% to $104.28 a tube and Brent roseate to $108.60 per barrel, up 2.72% connected the time aft comments from U.S. President Donald Trump and Iran's overseas curate further dented hopes of ⁠a woody to extremity vessel attacks and seizures astir the Strait of Hormuz.

FED OFFICIALS SIGNAL INFLATION FOCUS

The five-day streak of gains for the dollar would people its longest since precocious March, with the scale up astir 1.5% for the week. The euro was disconnected astir 1.4% connected the week, its biggest driblet successful 2 months.

Several Fed officials this week indicated that keeping ​inflation ​pressures successful cheque was a apical priority, portion others did not regularisation retired the anticipation that ​rate hikes whitethorn beryllium needed if terms pressures continued to mount.

Federal ‌Reserve Bank of New York President John Williams said precocious connected Thursday helium did not spot a request close present for the cardinal slope to measurement immoderate alteration successful involvement complaint argumentation amid the uncertainty created by the Middle East warfare arsenic monetary argumentation was successful a "good place."

Markets are present pricing successful a 48.4% accidental the Fed could hike rates by astatine slightest 25 ground points astatine its December meeting, compared with 14.3% a week ago, according to CME FedWatch.

The output connected benchmark U.S. 10-year notes was past up 12 ground points, connected gait for its biggest regular leap since April 9, 2025, to 4.579%. The 30-year enslaved output changeable up 10.5 ground ‌points to 5.1178% aft hitting 5.122, its highest since May 22.