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Dollar wobbles, oil’s dash to $100 chills sentiment, Yen stands big

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The Japanese yen was pinned near its best level since February on Wednesday, leaving the dollar on the ‌defensive as traders grappled with oil prices heading toward $100 a barrel amid an expanding war in the Middle East.

Iranian-backed Houthis in Yemen attacked several Saudi cities, drawing a U.S. partner further into a battle that has dragged on for more than six months, as U.S. forces struck multiple Iranian oil tankers and Iran threatened a U.S. station in Jordan.

Brent crude futures rose by more than 1.48% to $99.37 a barrel, weighing on global markets ahead of a U.S. inflation data on Friday that will set the stage for central bank meetings next week in the U.S. and Japan.

The currency market nudged the dollar down a touch in response, though some analysts said that was due to the yen’s swift rally over the past week.

The euro held constant at $1.1631 while the pound was last bought at $1.3546. ​The dollar index, measuring the U.S. currency against a basket of six major rivals, was at 98.15, near its lowest level in nearly two weeks.

OCBC strategists said the current increase keeps Fed policy implications from higher energy prices in focus, especially after last week’s robust U.S. payrolls report reignited expectations of another rate hike. “Higher oil and rates should help limit USD fall for now but we anticipate a more dramatic move will await confirmation from the impending inflation data,” they said in a note.

The yen has been under focus after its 4% surge in September that has altered the math for the popular carry trade in which investors borrow in yen at a low cost and invest in other currencies and assets yielding better interest.

The yen was stronger at 153.65 per dollar, close to the seven-month peak of 152.89 struck on Tuesday. The surge has been broad-based with the Japanese currency strengthening against the euro and sterling as well as favorite carry-trade targets such as the Mexican peso and Turkish lira.

The increase has been fueled by expectations of quicker tightening by the Bank of Japan and the return of offshore cash by Japanese investors and pressure from Washington for a higher yen.

Traders broadly expect the BOJ to hike rates by 25 basis points at its September 17-18 meeting but the rise will rest on if Governor Kazuo Ueda delivers hawkish comments and the wild card will be the Federal Reserve.Aninda Mitra, head of Asia macro and investment strategy at BNY Investments, stated “Much will depend on how the market prices in the Fed’s path of interest rates too.We estimate the Yen’s “fair value” to be in the 140’s and a further move to that area should not be a total surprise following what has clearly been an overshoot to the side of excessive Yen weakness.”

The Australian dollar gained 0.12% to $0.7225, just below a four-month high set in the previous session, in Pacific trade. The New Zealand dollar was up 0.16% at $0.5862.

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Petrol price cut by Rs2.71, diesel drops 30 paisa per litre

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Motorists have suffered another blow with the latest gasoline price review, which has once again seen petrol and diesel prices drop.

Petrol has seen a reduction of Rs2.71 per litre, while diesel has become 30 paisa cheaper.

According to the fuel price information provided, the new prices will come into force on Wednesday (14 October 2026).

New fuel prices

The petrol price has been cut by Rs2.71 per litre to Rs392.66 per litre.

The company announced that the price of high-speed diesel was decreased by 30 paisa per litre and the new pricing is Rs396.82 per litre.

Daily pricing mechanism

The latest revision comes after the government shifted to daily fuel price evaluations, allowing petroleum rates to respond more often to fluctuations in overseas markets.

Under the new mechanism, pricing will be determined based on international market rates averaged over seven days, among other things, such as benchmark prices, premiums and charges.

It is a scheme designed to ensure that changes in world oil prices are passed on to consumers more quickly.

According to the price information, fuel prices would not change on public holidays, Saturdays and Sundays.

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Dollar languishes as focus turns to CPI, Fed speakers

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The dollar was down on Wednesday as traders anticipated further clues on timing of interest rate hikes to tackle stubborn inflation.

The dollar retreated from an 18-month high in the last session, as oil prices slipped and investors reviewed the AI-driven surge that has bolstered demand for U.S. assets. The euro clung to gains, with budget worries in France keeping regional bond yields high and markets on edge.

Attention now turns to the release of US consumer price index data and speeches by Federal Reserve governors that could provide clues on the interest rate outlook.The danger is that the core CPI surprises to the upside due to strong consumer demand and higher expenses, driving up market pricing of an October Fed hike and the USD’, Carol Kong, a currency strategist at Commonwealth Bank of Australia, said in a note.

The dollar index, which measures the greenback against a basket of currencies, was down 0.02% at 102.16 after down 0.35% on Tuesday. The euro was up 0.04% at $1.1203.

The dollar was last barely changed at 158.32 yen and sterling was last up 0.03 percent at $1.3256.

The dollar continued losses on Tuesday as New York Fed President John Williams said he still expects one more rate hike this year, but sees no need for any increases in 2027.

The US Labour Department is set to issue its ⁠CPI for September, which is predicted to have increased by 0.6% month-on-month after a 0.4% rise in August, while annual inflation is expected to rise to 3.6% from 3.4%. Also set to be released is the Fed’s Beige Book.

Traders priced in a 77% likelihood the Fed will keep rates steady at its October 27-28 ​meeting, compared with 51% ​a month earlier, according to CME Group’s FedWatch Tool, while ⁠pricing in around 75 basis points of tightening to late 2027.

Bets on a Fed rate hike later this month were dumped after two members urged for gathering more evidence before judging whether additional tightening is needed, while Fed Governor Christopher Waller said inflation expectations remained “well anchored.”

Richmond Fed President Thomas Barkin is slated to take part in a fireside chat in Virginia and Federal Reserve Vise Chair for Supervision Michelle Bowman is to take part in discussions in Bangkok.

The International Monetary Fund and World Bank are holding their annual meetings in Bangkok, with European Central Bank President Christine Lagarde likely to appear multiple times on Wednesday.

The Australian dollar advanced 0.06% to $0.6984 against the greenback and New Zealand’s kiwi rose 0.09% to $0.5614.

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Oil prices up after escalation in Middle East tensions

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The report said the weekend attacks on two oil tankers and strikes by Yemen’s Iran-backed Houthi movement on Saudi Arabia fueled investor concerns about future regional oil supply disruptions.

Brent crude prices jumped 76 cents, or 0.73%, to $105.48 a barrel at 7:04 p.m. EDT Sunday. U.S. West Texas Intermediate (WTI) crude futures increased 59 cents, or 0.64%, to $92.44 a barrel.

Houthi fighters claimed responsibility for a missile attack on Riyadh’s international airport Saturday that killed 13 people and wounded more than 300 others.

Saudi police announced another death and further injuries Sunday in a second attack on the airport.

The Federal Aviation Administration (FAA) cautioned U.S. airlines on Sunday to exercise extreme caution flying in or above Saudi airspace, citing increased security threats stemming from the ongoing military conflict and disruptions to navigation systems, Reuters reported.

A notification to airmen (NOTAM) by the FAA, effective through Dec. 10, comes after a series of strikes on Riyadh, the capital of Saudi Arabia, including a new wave over the weekend.”Threats could pose a potential risk to aircraft during all phases of flight, including overflight, arrival and departure,” the FAA said.

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