Despite lower crude oil prices, why did the US dollar stay strong?

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The US dollar stayed strong because investors kept pricing in further US Federal Reserve rate hikes, helped by stronger-than-expected US labour-market signals.

The US dollar remained firm even as crude oil prices fell, because expectations of additional tightening by the US Federal Reserve continued to support the greenback. In Malaysia, the ringgit ended slightly lower at 4.0920/0965 against the US dollar by 6 pm, reflecting that regional sentiment was still weighed by Fed rate-hike concerns.
Fed rate-hike expectations continued to support the greenback
When markets expect the Fed to raise rates, the US dollar typically benefits because higher US interest-rate expectations attract demand for dollar assets. In this case, that expectation continued to underpin the US dollar’s strength despite lower crude oil prices, which can otherwise ease pressure on currencies linked to energy costs.
May JOLTS data came in above consensus
A key catalyst was the US Job Openings and Labor Turnover Survey (JOLTS) for May, which showed a higher-than-expected number of job openings. That stronger labour-market reading reinforced the idea that US monetary tightening could remain on the table, keeping investor focus on the Fed.
Markets were also watching the ADP Employment Change
Traders were turning attention to the ADP Employment Change for June after the May JOLTS update. In the same reporting, markets were described as observing this upcoming data point, which would further shape expectations around Fed policy and, in turn, currency sentiment.
US dollar strength showed up in ringgit moves against multiple currencies
The ringgit’s performance illustrated how dollar strength played out across currency pairs: it fell versus the British pound to 5.4203/4262 and slid versus the euro to 4.6600/6651, while it rose against the Japanese yen to 2.5144/5174. At the same time, it was mixed versus regional currencies, such as rising against the Thai baht and slipping slightly against the Singapore dollar.

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Despite lower crude oil prices, why did the US dollar stay strong?

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