Shafaqna English– The dollar remained subdued on Monday(7 Sep 2026) despite higher Fed hike expectations, as Middle East tensions threatened to push global central banks toward synchronized tightening, reducing the dollar’s relative yield appeal.
A shift toward the yen and concerns over U.S. debt added pressure. With U.S. markets closed, Asian trading was quiet, and the dollar failed to sustain post‑jobs report gains.
The euro was flat at $1.1609, sterling eased to $1.3513, and the dollar index held at 99.16. Markets priced a 57% chance of a September Fed hike, with Friday’s CPI data key.
BBH analysts noted that a hot CPI would likely confirm a hike and support the dollar, while a cooler reading could lead to a dovish repricing. However, even if the Fed hikes, they doubted the dollar would make new highs, given tightening by other major central banks.
The ECB is almost certain to raise rates to 2.75% on Thursday, with more priced by December, while the BOJ has a 75% chance of a September 18 hike and a 60% chance of another by December.
Source: Reuters
Dollar in wait-and-see mode