Dollar Strengthens Against Shekel, Nears Two-Month High Globally

The U.S. dollar saw a 0.3% increase against the Israeli shekel at the start of the trading week, trading above 3.05 shekels per dollar, attributed to a slight weakening of the local currency. The euro also rose by 0.2%, trading just below 3.48 shekels. Globally, the dollar continued its upward trend, with the U.S. Dollar Index (DXY) climbing 0.2% to 101.1 points, nearing a two-month high against a basket of major currencies. The euro and pound weakened, trading at $1.1379 and $1.3232 against the dollar, respectively.

This dollar strength is supported by geopolitical tensions surrounding Iran, robust U.S. economic fundamentals, and high yields on long-term U.S. government bonds. Meanwhile, oil prices continued to rise, with Brent crude surpassing $106 per barrel after a more than 1% increase.

Key U.S. macroeconomic data releases are anticipated this week. The Personal Consumption Expenditures (PCE) price index for the second quarter is due Wednesday, followed by the September jobs report on Friday. Market expectations suggest these figures will support a continued tight monetary policy. Currently, markets are pricing in a 65% probability of another interest rate hike by the Federal Reserve at its upcoming meeting on October 28.