FOREX-Dollar gains against euro as Fed, Middle East in focus

“Largely I think we’re still basing currency movements on interest rates,” and the Fed’s “very determined attempt to keep interest rates high to fight inflation,” said Joseph Trevisani, senior analyst at FXStreet.com in New York. Since mid-July, the benchmark 10-year Treasury yield has climbed about 100 basis points and the dollar index has risen around 7%. Fed funds futures traders are pricing in a 40% chance that the Fed could hike rates again by year-end, but only 11% odds of an increase next month, according to the CME Group's FedWatch Tool.