Oil-driven price pressures and renewed Gulf attacks have pushed markets toward anticipating faster rate hikes, lifting the dollar ahead of US inflation data.
The dollar is rising against most of its rivals amid renewed fighting in the Middle East and the closure of the Strait of Hormuz, fueling inflation expectations and potential rate hikes by central banks around the world.
Key Points
- The dollar is supported by expectations of faster Federal Reserve rate hikes.
- Rising energy prices fuel concerns about global inflation.
- U.S. inflation data and Powell’s testimony could signal the direction of monetary policy.
Singapore, July 13, 2026 – the dollar is rising against most currencies amid a new escalation of conflict in the region and the closure of a key route through the Strait of Hormuz, heightening inflation concerns and increasing the likelihood of rate hikes by global central banks.
In the dollar-yen pair, the dollar rose 0.2% to 162.08 yen. The euro weakened by 0.1%, trading at around 1.1397 U.S. dollars, and the British pound fell 0.2% to 1.3374 U.S. dollars.
The Australian dollar fell 0.3% to 0.6928 U.S. dollars, while the New Zealand dollar weakened 0.1% to 0.5757 U.S. dollars.
U.S. and Iranian forces exchanged massive rocket-and-drone strikes over the weekend: Tehran carried out strikes on U.S. facilities across various locations in the Persian Gulf on Sunday and said it had again closed the strategic Strait of Hormuz.
Oil prices rose in Asian trade: Brent futures were up about 4.1% and traded near $79.11 a barrel.
After the escalation at the end of last week, which continued through the weekend, the dollar reacted, and oil prices were a moving factor.
– Tony Sycamore
The dollar, without a doubt, was the main winner from the war last time. But this time it starts from a completely different point: it has strengthened significantly, and there has already been a fairly prolonged reassessment of expectations for the Fed.
– Thomas Mathews
Analysts expect inflation risks to remain in the spotlight: U.S. CPI data on Tuesday, PPI data on Wednesday, and Powell’s testimony before Congress could influence the direction of monetary policy.
The Bank of Japan may revise its growth forecast for fiscal year 2026 and focus on the risk of inflation overshooting, as higher costs from a weak yen and demand for AI partly offset falling oil prices, according to three sources familiar with the central bank’s position.
In the cryptocurrency market, Bitcoin fell 2.1% and traded at $62,790.02, while Ether dropped 2.3% to $1,779.01.
Markets remain attentive to geopolitical tensions and fluctuations in energy prices, awaiting new inflation data and monetary policy signals from global central banks.
Source: Original Article
