Upbeat U.S. data published yesterday pushed U.S. Dollar (CURRENCY:USD) to three-and-a-half week highs against other global currencies. Traders will now turn to the Federal Reserve’s comments to be published later today.

USD gains ground, equities dip

USD/JPY (USDJPY) surged 0.29% to 109.45 during European trade while the greenback maintained its resilience against the Euro with EUR/USD down by 0.40% to 1.1268. GBP/USD (GBPUSD) lost momentum against the dollar, dipping 0.30% to 1.4417. Even a stronger U.K. jobs data failed to gain traction as increased possibility of a rate hike by the Fed weighed over it.

Stock markets in both Asia and Europe showed lackluster performance after a potential rate hike by the Fed once again took center stage. Growing assumptions of a shift towards tighter monetary policies dampened equity outlook, which was until now comforted by the thought of prolonged continuity of loose money. However, a rate hike might squeeze that and force companies to withdraw money invested globally.

In Asia, Hong Kong’s Hang Seng (INDEXHANGSENG:HSI) took the hardest hit, slipping 1.45% to 19,826.41. Shanghai SE Composite Index followed losing 1.27% to 2,807.51. Europe’s Euronext 100 (INDEXEURO:N100) recorded 0.28% fall to 847.73 during early trading hours.

Iran’s high output adds worry

Oil prices and the corresponding iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) fell during the European trading session even as supply disruptions continue to ease the building supply glut. According to analysts, rising supplies from oil producing countries, particularly Iran, have offset outages from Canada and Nigeria. However, oil brokerage firm PVM maintained that oil prices should breach $50 levels as the commodity finds support both fundamentally and technically. Brent Crude fell 0.22% to $49.17, and West Texas Intermediate Crude had lost 0.04% to $48.29 per barrel.