Dollar Rises Ahead of Expected Rate Hike Amid Gulf Tensions
The US dollar has gained momentum on September 14, 2026, as expectations of a Federal Reserve interest rate hike and escalating geopolitical tensions in the Gulf pushed energy prices higher. According to ING financial analysis, a higher-than-expected Consumer Price Index reading last week has strengthened market expectations for a 25 basis point rate increase by the Federal Reserve on Wednesday.
The money markets are pricing in a 22 basis point adjustment, which would boost the US dollar further. External factors have also contributed to the greenback's rise, including a surge in crude oil prices following Saudi Arabia's shutdown of its East-West pipeline due to drone attacks originating from Iraq.
The pipeline serves as an essential alternative route to the Strait of Hormuz, handling approximately 7 million barrels per day in exports. Furthermore, talks led by Oman regarding temporary shipping routes through the Strait of Hormuz involving Iran and Gulf nations have been postponed, adding to market uncertainty.