Dollar holds firm as markets price in another Fed hike

The U.S. dollar remains strong, trading above 100.5 on September 22, 2026, near its highest level since July, as markets price in another Federal Reserve rate hike in October with a 56% probability. The Fed raised rates by 25 basis points to 3.75%-4.00%, its first increase since July 2023, citing persistent inflation, an oil shock from U.S.-Iran tensions, and stronger economic data. USDJPY traded near 157.50, while EURUSD stayed around 1.14 and GBPUSD near 1.33. Oil prices have eased, with WTI crude falling to about $91 per barrel, potentially reducing inflationary concerns. Investors watch for a possible decline below the 100 mark, which could signal falling oil prices and Treasury yields outweighing the Fed's hawkish stance.