Dollar climbs on oil, yields; Aussie slips despite rate hike

The U.S. dollar climbed on Tuesday, testing multi-month highs against major currencies, driven by elevated oil prices and rising Treasury yields, while the Australian dollar fell despite a central bank rate hike. The euro dropped 0.32% to a three-month low of $1.13325, and the pound fell 0.25% to $1.3221, as markets priced in further Federal Reserve hikes. Morgan Stanley now forecasts dollar strength into 2027, citing robust U.S. growth and rate differentials. Australia's central bank raised its cash rate to 4.60%, but the Aussie slid 0.44% to $0.6988 after the governor hinted at a possible hold. Key U.S. jobs data on Friday will test the dollar's momentum.