Dollar Firms Up on Inflation Fears

2026-03-12 02:21 By Jam Kaimo Samonte 1 min. read

The dollar index climbed toward 99.5 on Thursday, rising for the third straight session as oil prices resumed their rally, heightening inflationary risks and reducing the likelihood of Federal Reserve interest rate cuts.

Oil surged for a second day as the prospect of a protracted Iran war overshadowed a coordinated release of oil reserves by major economies, with the IEA approving its largest-ever release of 400 million barrels.

Iraq also halted operations at its oil terminals after two oil tankers were targeted in Iraqi waters, highlighting elevated supply risks in the region.

On the data front, February inflation came in line with forecasts, showing stable but above-target CPI.

However, the full impact of the energy surge from the conflict is yet to be reflected.

The Fed is widely expected to keep the federal funds rate steady next week, with traders pricing in only one 25 bps cut, possibly in September.



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Dollar Firms Up on Inflation Fears
The dollar index climbed toward 99.5 on Thursday, rising for the third straight session as oil prices resumed their rally, heightening inflationary risks and reducing the likelihood of Federal Reserve interest rate cuts. Oil surged for a second day as the prospect of a protracted Iran war overshadowed a coordinated release of oil reserves by major economies, with the IEA approving its largest-ever release of 400 million barrels. Iraq also halted operations at its oil terminals after two oil tankers were targeted in Iraqi waters, highlighting elevated supply risks in the region. On the data front, February inflation came in line with forecasts, showing stable but above-target CPI. However, the full impact of the energy surge from the conflict is yet to be reflected. The Fed is widely expected to keep the federal funds rate steady next week, with traders pricing in only one 25 bps cut, possibly in September.
2026-03-12
Dollar Back to Above 99
The dollar index resumed gains to 99.1 on Wednesday, hovering near the high levels reached since the war with Iran began earlier this month. Traders continue to monitor the war and its impact on oil markets. Oil saw brief relief amid reports that countries are preparing to release reserves, but prices resumed their rise, keeping concerns about an energy-driven inflation spike alive. On the data front, February inflation came in line with forecasts, showing stable but above-target CPI. However, the full effect of the energy surge from the conflict is yet to be reflected. The Fed is widely expected to keep the federal funds rate steady next week, with traders anticipating only one 25bps cut, possibly in September. The greenback was mostly higher against the euro and the yen but was losing against the Australian dollar as traders ramp up bets the RBA will raise interest rates next week.
2026-03-11
Dollar Fluctuates on Mideast Uncertainty
The dollar index slipped below 99 on Wednesday, reversing gains from the previous session as traders contended with mounting uncertainty over the Middle East conflict. The Trump administration sent mixed signals on the Iran war, with President Donald Trump saying the conflict could end soon amid mounting market pressure, while senior officials indicated that military operations were intensifying and diplomatic talks remained unlikely. Iran’s Revolutionary Guards dismissed Trump’s claims, warning that the blockade would continue until US and Israeli attacks cease. Meanwhile, oil prices declined further after reports that the International Energy Agency proposed the largest release of oil reserves in its history to help stabilize markets. Investors now turn to a key US inflation reading that could provide insight into recent price trends, though it is not yet expected to capture the impact of the Iran war.
2026-03-11