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US Dollar
Source: Newsmaker.id
The US dollar strengthened on Wednesday (October 21, 2026), supported by rising US Treasury yields and a recovery in global oil prices amid growing concerns over the ongoing conflict in the Middle East. The US Dollar Index (DXY) gained approximately 0.1% to 101.78 after previously touching 101.50, its lowest level in nearly three weeks. The greenback's recovery came as renewed uncertainty surrounding the US-Iran conflict boosted demand for safe-haven assets, while higher energy prices intensified concerns about global inflationary pressures.
Earlier, the US dollar had weakened following disappointing US housing market data and speculation about potential progress in negotiations between Washington and Tehran. These expectations temporarily weighed on oil prices and reduced demand for the dollar as a safe-haven currency. However, market sentiment quickly reversed as diplomatic uncertainty resurfaced and oil prices rebounded. Danske Bank analyst Jens Naervig Pedersen noted that shifting geopolitical sentiment was among the key factors driving the dollar's recovery. Meanwhile, the euro's weakness, fueled by growing concerns over France's government debt situation, provided additional support for the greenback.
Despite its recent gains, the US dollar continues to face challenges as investors grow increasingly concerned about the scale of investments in artificial intelligence (AI). ING analyst Francesco Pesole suggested that concerns over AI-related financing could leave the dollar vulnerable to further weakness if oil prices decline again. Lower energy prices could ease inflationary pressures and reduce expectations of additional Federal Reserve interest rate hikes. Nevertheless, the possibility of further monetary tightening and persistently elevated oil prices could continue to support the dollar. Investors are now closely monitoring energy prices, US Treasury yields, and the Federal Reserve's upcoming interest rate decision on October 27–28 for further clues about the direction of global currency markets. (mrv)
Source: Newsmaker.id