Dollar Nears 18-Month Peak Amid Mideast Tensions and Inflation Concerns

Dollar nears 18-month high as Mideast conflict and inflation data drive market focus. Investors react to Fed signals and global economic shifts.

Editorial Desk

October 12, 2026 One Min Read

POLICY WIRE — New York, United States — The U.S. dollar maintained its strong position in early Asian trading on Monday, approaching its highest level in 18 months. This comes as tensions in the Middle East continue to influence investor sentiment ahead of critical U.S. inflation reports.

The DXY index, which tracks the dollar against a basket of currencies, remained close to 18-month highs, supported by higher Treasury yields that have increased demand for the currency. Despite August’s PCE data showing slightly lower-than-expected inflation, broader market trends indicate a continued focus on long-term inflation risks and economic resilience.

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On Thursday, the dollar reached its strongest level since April 2025, driven by expectations of further interest rate hikes from the Federal Reserve. Meanwhile, the euro faced pressure from political instability in Europe, including concerns over France’s debt levels and an upcoming Spanish election. Oil prices also rose due to renewed hostilities in the Middle East, further influencing currency movements.

Reporting by Policy-Wire (PW)

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