Dollar at 13-Month High, Oil Breaks Key Moving Average

The US Dollar Index hit 101.36 on Wednesday, its highest in 13 months. The 0.2% gain extended a multi-week run that has squeezed commodity-linked currencies and pushed crude below a critical technical level.

West Texas Oil CFD broke its 200-day moving average on the same session, capping a four-week slide from the May high near $110 a barrel. Front-month Brent crude fell 1.3% in Asian trading Thursday to $72.88, the lowest since early March. The move followed the normalisation of Gulf shipping disruptions that had added a localised risk premium. Traders said the breakdown below the 200-day reinforced a near-term bearish bias, with the $75.25 area now serving as short-term resistance. A drop below that opens the path toward $67.40 and then $63.80.

Across equity markets, the picture was split. The S&P 500 edged down 0.1% during regular hours and the Nasdaq-100 fell 0.4%. Micron broke the pattern after the close. The memory-chip maker posted a Q3 earnings beat that sent its shares up 15% to $1,213 in after-hours trading. That triggered a broad rally in semiconductor and hardware stocks across Asia. E-mini S&P 500 futures rose 0.4% in Thursday's Asian session. Nasdaq-100 futures added 1.6%. The Dow Jones Industrial Average had managed a 0.4% gain during cash hours.

Bond markets showed little reaction to the overnight equity swing. The US 2-year yield fluctuated near 4.15%. The 10-year yield consolidated around 4.40%. Portfolios maintained steady positions, adjusting for upcoming sovereign note supply and the US PCE inflation data due at 8:30 a.m. ET Thursday.

The dollar's strength hit the Australian and New Zealand dollars hardest among the majors. The Aussie fell 0.1% to $0.6893. The kiwi dropped 0.2% to $0.5641. Both currencies have slid against the greenback as commodity prices softened and risk appetite shifted away from export-oriented economies.

Spot gold extended its decline, falling 0.4% in Asian trading to $3,981 an ounce, a seven-month low. Traders cited capital rotation out of non-yielding hedges into higher-yielding alternatives as the dollar strengthened.

The PCE print tonight is the next scheduled catalyst. A hot reading would reinforce the dollar's upward path and add pressure on commodities and risk-sensitive currencies. A soft number could stall the dollar's advance, giving gold, bonds, and growth stocks a bid. Traders said positioning is skewed toward dollar longs, making a downside surprise the potentially higher-magnitude event for currencies and rates.