Dollar Strengthens

2026-07-23 13:08 By Joana Taborda 1 min. read

The dollar index appreciated to 101.3 on Thursday, the highest level in about three weeks, as surging oil prices and escalating geopolitical tensions fueled expectations that the Fed will need to raise interest rates.

Markets are now pricing in a more than 33% chance of a rate hike next week, while the probability of a September increase has climbed above 78%, up from 61% a day earlier.

Hostilities in the Middle East continue to intensify, with no signs of a near-term resolution.

As a result, oil prices have surged nearly 31% above their pre-conflict levels seen earlier this month.

Although inflationary pressures have remained relatively contained so far, the latest spike in energy prices has renewed concerns that higher oil costs could feed into broader inflation, prompting the Fed to maintain a tighter monetary policy stance.

The greenback advanced against the euro after the ECB left interest rates unchanged, as expected, while also posting gains against the yen and the pound.



News Stream
Dollar Strengthens
The dollar index appreciated to 101.3 on Thursday, the highest level in about three weeks, as surging oil prices and escalating geopolitical tensions fueled expectations that the Fed will need to raise interest rates. Markets are now pricing in a more than 33% chance of a rate hike next week, while the probability of a September increase has climbed above 78%, up from 61% a day earlier. Hostilities in the Middle East continue to intensify, with no signs of a near-term resolution. As a result, oil prices have surged nearly 31% above their pre-conflict levels seen earlier this month. Although inflationary pressures have remained relatively contained so far, the latest spike in energy prices has renewed concerns that higher oil costs could feed into broader inflation, prompting the Fed to maintain a tighter monetary policy stance. The greenback advanced against the euro after the ECB left interest rates unchanged, as expected, while also posting gains against the yen and the pound.
2026-07-23
US Dollar Extends Decline
The dollar index fell to around 101 on Thursday, extending losses from the previous session as traders weighed renewed inflation concerns from surging energy costs against a softer US economic backdrop while seeking clues on the Federal Reserve’s rate outlook. While markets widely expect the Fed to hold rates steady at next week’s meeting, uncertainty has increased over the path of future policy amid unclear guidance from new Chair Kevin Warsh. Meanwhile, safe-haven demand helped limit further dollar losses as Middle East tensions remained in focus. President Donald Trump said the US would strike Iranian infrastructure in response to any attacks on vessels in the Strait of Hormuz, while Tehran vowed retaliation against regional energy and infrastructure targets. Elsewhere, attacks on Red Sea tankers, the first such incidents since late February, further raised concerns over a broader regional conflict and potential disruptions to global trade flows.
2026-07-23
Dollar Little Changed
The dollar index traded little changed around 101.1 on Wednesday, with the situation in the Middle East continuing to dominate the headlines. Oil prices extended gains to a six-week high as both the US and Iran signaled that a resumption of peace talks is unlikely in the near term despite ongoing mediation efforts. The rise in oil prices kept fears of renewed inflationary pressures elevated. Meanwhile, investors await next week's Federal Reserve policy meeting, with policymakers now in their customary pre-meeting blackout period. The Fed is widely expected to leave the federal funds rate unchanged. However, markets continue to price in the possibility of policy tightening later this year, with traders assigning roughly a 61% probability of a rate hike at the September meeting. The greenback was largely unchanged at 40-year highs against the yen and near one-week highs against the pound, while edging slightly lower against the euro.
2026-07-22