Full Breakdown
Dollar Index Climbs Above 100.5 as Fed Hikes Rates and Middle-East Tensions Persist
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Core Market Move on September 22, 2026
On Tuesday, September 22, 2026, the U.S. Dollar Index (DXY) rose above 100.5, reaching its highest level since July. The advance coincided with the Federal Reserve’s first interest-rate increase since July 2023, a 25-basis-point lift to a target range of 3.75 %–4.00 %.
Monetary Policy and Inflation Outlook
The rate hike was justified by “persistent inflation” and an “oil shock” linked to renewed U.S.–Iran tensions. The Fed also signaled that the fight against inflation remains far from over, prompting markets to price in a further increase in October. The probability of an October hike rose from 43.5 % to 56 % within a week.
Oil Prices and Geopolitical Context
Earlier oil-price spikes—driven by attacks in the Strait of Hormuz and a temporary disruption to Saudi Arabia’s East-West pipeline—pushed crude above $100 per barrel. By September 22, WTI crude fell to around $91 per barrel and Brent traded below $100, reflecting easing concerns as Gulf-supply sentiment improved.
Currency Market Reactions
Higher U.S. rates made dollar-denominated deposits and short-term Treasuries more attractive. USD/JPY hovered near 157.50, keeping traders alert to possible yen-support interventions. The euro stayed around 1.14 against the dollar, while sterling lingered near 1.33, near a two-month low after the UK budget deficit was reported at £18.3 billion for August.
Official Comments
U.S. President Donald Trump said he expects oil prices to fall sharply once the war ends, but projected that the conflict would not conclude before the November midterm elections. The Federal Reserve’s rate decision and forward guidance were presented as a continued effort to curb inflation despite the volatile external environment.