Strong US Dollar Dominates on Fed Hike Bets

The US Dollar has advanced broadly, strengthening against a basket of major currencies including the Euro, Japanese Yen, Australian Dollar, and Swiss Franc. This rally is primarily fueled by growing market expectations of interest rate hikes by the Federal Reserve. Consequently, the US Dollar Index traded higher, and currencies like the Yen remained near multi-decade lows.

Tensions in Strait of Hormuz Lift Oil Prices

Geopolitical risks in the Middle East have increased following an attack on a cargo ship near the Strait of Hormuz, prompting the UN to pause a maritime evacuation plan. The incident contributed to a rise in WTI crude oil prices, which provided support for commodity-linked currencies such as the Canadian Dollar. The tensions were also cited as a factor supporting the safe-haven status of the US Dollar.

Gold Pressured by Dollar Strength

Gold prices have weakened, struggling to hold gains as a stronger US Dollar creates significant headwinds for the precious metal. The dollar's dual support from both prospective Fed rate hikes and its appeal as a safe-haven asset amid geopolitical tensions has overshadowed gold's traditional role. This dynamic has resulted in fresh selling pressure on gold during Asian trading.

Inflation Concerns Rattle Asian Equity Markets

A wave of risk aversion swept through Asian equity markets, leading to a significant downturn in regional stock indices. The sell-off was driven by renewed global inflation fears, which were amplified by news of price hikes from major technology companies due to supply chain issues.