Dollar holds 18-month high as Gulf tension and US inflation keep investors on edge
TLT•The dollar index rose 0.37% to 102.58, its highest level since April 2025, as Middle East attacks fueled safe-haven demand ahead of US inflation data. Traders priced a 78% chance that the Federal Reserve will hold rates this month.
1. Dollar gains as risks mount
The dollar held at an 18-month high on Monday as weekend attacks in the Middle East kept investors cautious before US inflation data due Wednesday. The dollar index rose 0.37% to 102.58, while Brent crude gained 2.3% to $107.17 a barrel.
2. Inflation data in focus
Investors’ bullish dollar positions rose to about $36 billion in the week ended October 7, from $8.4 billion three weeks earlier. Traders priced a 78% chance that the Fed would hold rates this month, up from 51% a month earlier. Cleveland Fed President Beth Hammack said the Fed should move “relatively quickly” to restrictive policy to control inflation.
3. Euro weakens
The euro fell 0.4% to $1.1156, near a 17-month low, after five consecutive weeks of losses. The article cited investor concerns about France’s fiscal health ahead of its 2027 presidential election.
